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 $ 80 $ 60 $ 70 Variable expenses Direct materials 24.00 18.00 4.90 Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 24.00 48.00 $32.00 27.00 45.00 $15.00 44.10 49.00 $21.00 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 $4 per pound with a maximum of 4,700 pounds available each month.

Explanation / Answer

Product A Product B Product C Contribution margin per unit 32 15 21 Pounds per unit 6 4.5 1.23 Contribution margin per pound 5.33 3.33 17.07 b Product A Second Product B Third Product C First Contribution margin per pound for product C will be $17.14 if not rounded off

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