Question

Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit):

	Product
	A				B				C
Selling price	$	70			$	50			$	60
Variable expenses:
Direct materials		21.00				15.00				4.20
Other variable expenses		21.00				22.50				37.80
Total variable expenses		42.00				37.50				42.00
Contribution margin	$	28.00			$	12.50			$	18.00
Contribution margin ratio		40	%			25	%			30	%

Demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. The same material is used in each product. The material costs $5 per pound with a maximum of 4,700 pounds available each month. Required: a. Compute contribution margin per pound of materials used for products A,B, and C. (Round your intermediate calculations and final answers to 2 decimal places.)

Answer 1

Answer:

Calculation of Contribution Margin Per Pound of materials used for Product A, B and C

	Product
	A	B	C
Contribution Margin Per Unit	$28	$12.50	$18
Material Requirement Per Unit in Pounds (note 1)	4.20	3.00	0.84
Contribution margin per pound of material used (Contribution margin per unit / Material Requirement Per Unit in Pounds)	$6.67	$4.17	$21.43

Note 1 -- Calculation of Direct Material in Pounds requirement for each product

	Product
	A	B	C
Direct Material Cost Per Unit	$21	$15	$4.20
Material Cost Per Pound	$5	$5	$5
Requirement of Material Per Unit in pounds (Direct Material Cost / Material Cost per pound)	4.20	3.00	0.84

Answer 2

aaaaaaaaaaaaaaaaa