Benoit Company produces three products, D, E, and F. Cost and revenue characteristics of the three products follow (per unit):
Product D E F
Selling price $46 $41 $40
Less variable expenses:
Direct materials 18 12 9
Labor and overhead 13 9 19
Total variable expenses 31 21 28
Contribution margin $15 $20 $12
Demand for the company’s products is very strong, with far more orders on hand each month than the company has raw materials available to produce. The same material is used in each product. The material costs $3 per pound, with a limited number of pounds available each month. In what order should the company fill the demand for the three products?
- D,E,F
- E.D.F
- F,D,E
- E,F,D