Childress Company produces three products, K1, S5, and G9. Each product uses the
ID: 2486088 • Letter: C
Question
Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, S5 uses 2.2 pounds of the material, and G9 uses 6.5 pounds of the material. Demand for all products is strong, but only 55,400 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. K1 S5 G9 Selling price $155.8 $108.92 $205.55 Variable costs 91.00 90.00 136.00 Required: 1. Calculate the contribution margin per pound for each of the three products. (Round your answers to 2 decimal places.)
Contribution margin per pound Product K1 Product S5 Product G9 Contribution margin per pound Order in which products should be produced and filled:Explanation / Answer
Product K1 Product S5 Product G9 Contribution 64.8 18.92 69.55 No of Material Required Per Unit 4 2.2 6.5 Contribution margin per pound 16.2 8.6 10.7 Order in which products should be produced and filled: 1 3 2 Product K1 Product S5 Product G9 Selling price 155.8 108.92 205.55 Variable Cost 91 90 136 Contribution 64.8 18.92 69.55
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