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 Selling price $ 75 $ 55 $ 65 Variable expenses Direct materials 22.50 16.50 4.55 Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 22.50 45.00 $30.00 24.75 41.25 $13.75 40.95 45.50 $19.50 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 5,800 pounds available each month. Required a. Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.) ibution Margin per Pound Product A Product B Product C b. Which orders would you advise the company to accept first, those for A, for B, or for C? Which orders second? Third? Product A Product B Product

Explanation / Answer

1 Product A Product B Product C Contribution margin per unit 30 13.75 19.5 Direct materials per unit 4.5 3.3 0.91 Contribution margin per pound 6.67 4.17 21.43 b Product A Second Product B Third Product C First

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