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28 Sep 2019
Benoit Company produces three products, A, B, and C. Dataconcerning the three products follow (per unit):
Product
A B C Selling price $ 120 $ 100 $ 110 Variableexpenses: Direct materials 36.00 30.00 7.70 Other variable expenses 36.00 45.00 69.30 Total variableexpenses 72.00 75.00 77.00 Contributionmargin $ 48.00 $ 25.00 $ 33.00 Contribution marginratio 40 % 25 % 30 % Required:
a. Compute contribution margin per pound of materials used.(Round your intermediate calculations and final answers to2 decimal places.)
Contribution Margin per Pound Product A Product B Product C
b. Which orders would you advise the company to accept first, thosefor A, for B, or for C? Which orders second? Third?
ProductA ProductB ProductC
Benoit Company produces three products, A, B, and C. Dataconcerning the three products follow (per unit):
Product | |||||||||||||||||||||||||||||||||||||
| A | B | C | |||||||||||||||||||||||||||||||||||
| Selling price | $ | 120 | $ | 100 | $ | 110 | |||||||||||||||||||||||||||||||
| Variableexpenses: | |||||||||||||||||||||||||||||||||||||
| Direct materials | 36.00 | 30.00 | 7.70 | ||||||||||||||||||||||||||||||||||
| Other variable expenses | 36.00 | 45.00 | 69.30 | ||||||||||||||||||||||||||||||||||
| Total variableexpenses | 72.00 | 75.00 | 77.00 | ||||||||||||||||||||||||||||||||||
| Contributionmargin | $ | 48.00 | $ | 25.00 | $ | 33.00 | |||||||||||||||||||||||||||||||
| Contribution marginratio | 40 | % | 25 | % | 30 | % | |||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||
Lelia LubowitzLv2
28 Sep 2019
