Benoit Company produces three products, A, B, and C. Data concerning the three p

Question

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


Product
A B C
Selling price $80 $60 $70
Variable expenses:
Direct materials 24.00 18.00 4.90
Other variable expenses 24.00 27.00 44.10 Total variable expenses 48.00 45.00 49.00
Contribution margin $32.00 $15.00 $21.00
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 $6 per pound with a maximum of 5,800 pounds available each month.

Required:

(a)

Compute contribution margin per pound of materials used. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Contribution margin
Product A $ _____?_____
Product B $ _____?_____
Product C $ _____?_____

Explanation / Answer

A B C Selling price $80 $60 $70 Variable expenses: Direct materials 24.00 18.00 4.90 Other variable expenses 24.00 27.00 44.10 Total variable expenses 48.00 45.00 49.00 Contribution margin $32.00 $15.00 $21.00 Raw Material used (pounds) 4 3 0.817 Contribution per pound $8.00 $5.00 $25.70 Contribution margin Product A $ _____8.00_____ Product B $ _____5.00_____ Product C $ _____25.70_____

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