Business, 14.06.2021 15:50 kimboblack4192

Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product
A B C
Selling price $80 $56 $70
Variable expenses:
Direct materials 24 15 9
Other variable expenses 24 27 40
Total variable expenses 48 42 49
Contribution margin $32 $14 $21
Contribution margin ratio 40% 25% 30%
The company estimates that it can sell 1,000 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 6,600 pounds available each month. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials?

Answers: 2

Show answers

Answers

Answer from: kkpowell

Solution :

$\text{Working }$ $\text{A}$ $\text{B}$ $\text{C}$

A ( $\text{Direct material per unit}$ ) $ 24 $ 15 $9

B (Material cost per pound) $3 $3 $3

C=A/B (pound of material per unit) 8 5 3

D (Contribution margin per unit) $32 $14 $21

E=D/C (Contribution margin pound $ 4 $ 2.8 $ 7

of raw materials)

Order of preference to allocate material 2nd 3rd 1st

Since the product C has maximize 'contribution margin per pound' it will give 1st preference, followed by the product A and B.

The allocation of the available 5000 pounds of the raw material.

A B C

Maximize units that can be sold (A) 1000 1000 1000

Materials required per unit (B) 8 5 3

Total material requirement (C) 8000 5000 3000

Available raw material in pounds 5000 pounds

(-) first allocation to product C 3000 pounds

Remaining material 2000 pounds

(-) seconds allocation to product A 2000 pounds

Remaining for the product B 0 pounds

Now calculating the total contribution on the above allocation basis.

A B C Total

Material allocated to A(pounds) 2000 0 3000 5000

Contribution per pound (B) $ 4 $2.8 $7

Total contribution margin (AxB) $8000 $0 $21000 $29,000

Therefore, the total contribution margin is $29,000.

Answer from: Quest

the answer is a. $209,000

Answer from: Quest

Money believe but i may be wrong

Another question on Business

Business, 22.06.2019 03:30

Instructions: use the following information to construct the 2000 balance sheet and income statement for carolina business machines. round all numbers to the nearest whole dollar. all numbers are in thousands of dollars. be sure to read the whole problem before you jump in and get started. at the end of 1999 the firm had $43,000 in gross fixed assets. in 2000 they purchased an additional $14,000 of fixed asset equipment. accumulated depreciation at the end of 1999 was $21,000. the depreciation expense in 2000 is $4,620. at the end of 2000 the firm had $3,000 in cash and $3,000 in accounts payable. in 2000 the firm extended a total of $9,000 in credit to a number of their customers in the form of accounts receivable. the firm generated $60,000 in sales revenue in 2000. their cost of goods sold was 60 percent of sales. they also incurred salaries and wages expense of $10,000. to date the firm has $1,000 in accrued salaries and wages. they borrowed $10,000 from their local bank to finance the $15,000 in inventory they now have on hand. the firm also has $7,120 invested in marketable securities. the firm currently has $20,000 in long-term debt outstanding and paid $2,000 in interest on their outstanding debt. over the firm's life, shareholders have put up $30,000. eighty percent of the shareholder's funds are in the form of retained earnings. the par value per share of carolina business machines stock is

Answers: 3

Answer

Business, 22.06.2019 15:00

Ineed this asap miguel's boss asks him to distribute information to the entire staff about a mandatory meeting. in 1–2 sentences, describe what miguel should do.

Answers: 1

Answer

Business, 22.06.2019 17:30

Communication comes in various forms. which of the following is considered an old form of communication? a) e-mail b) letter c) skype d) texting

Answers: 2

Answer

Business, 22.06.2019 20:00

Acompetitive market in healthcare would a. overprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers b. underprovide healthcare because it would eliminate medicare and medicaid c. underprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers d. overprovide healthcare because it would be similar to the approach used in canada

Answers: 1

Answer

You know the right answer?

Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per u...

Questions