Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling priceper unit and variable costs per unit of each product follow.Selling price per unitVariable costs per unitKin$ 157.02105.00Ike$ 105.1684.00Вix$ 219.18149.00(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the threeproducts in the order in which management should produce and meet demand.Product Contribution MarginKinIkeBixContribution margin per poundOrder in which management should produce and meet demand:

Contribution Margin per Limited resource Contribution margin per unit of limited resource is…

Answered: a) Compute contribution margin per…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4
pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling price
per unit and variable costs per unit of each product follow.
Selling price per unit
Variable costs per unit
Kin
$ 157.02
105.00
Ike
$ 105.16
84.00
Вix
$ 219.18
149.00
(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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