1.04 7 points eBook Hint Print References Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the material, Ike uses 3.6 pounds of the material, and Bix uses 6.9 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Kin Ike Bix Selling price per unit Variable costs per unit $ 168.84 98.00 $ 118.92 84.00 $ 222.45 150.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Product Contribution Margin Kin Ike Bix Contribution margin per pound Order in which management should produce and meet demand:
1.04 7 points eBook Hint Print References Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the material, Ike uses 3.6 pounds of the material, and Bix uses 6.9 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Kin Ike Bix Selling price per unit Variable costs per unit $ 168.84 98.00 $ 118.92 84.00 $ 222.45 150.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Product Contribution Margin Kin Ike Bix Contribution margin per pound Order in which management should produce and meet demand:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the
material, Ike uses 3.6 pounds of the material, and Bix uses 6.9 pounds of the material. Selling price per unit and variable costs per unit
of each product follow.
Kin
Ike
Bix
Selling price per unit
Variable costs per unit
$ 168.84
98.00
$ 118.92
84.00
$ 222.45
150.00
(a) Compute contribution margin per pound of material for each product.
(b) If demand is limited, list the three products in the order in which management should produce and meet demand.
Product Contribution Margin
Kin
Ike
Bix
Contribution margin per pound
Order in which management should produce and meet demand:
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