Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price. Variable costs per unit: Direct materials. Direct labor Variable overhead Total variable cost per unit. Contribution margin per unit. $14.00 $20.00 Product A $70 $15.00 16 40 2 58 $12 Product B $75 24 28 2 54 $21 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct material cost is $8.00 per pound. The company has only 1,400 pounds of direct materials available for production. Assuming the company has made optimal use of its 1,400 pounds off direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials? Product C $85 20 32 3 55 $30
Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: Selling price. Variable costs per unit: Direct materials. Direct labor Variable overhead Total variable cost per unit. Contribution margin per unit. $14.00 $20.00 Product A $70 $15.00 16 40 2 58 $12 Product B $75 24 28 2 54 $21 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct material cost is $8.00 per pound. The company has only 1,400 pounds of direct materials available for production. Assuming the company has made optimal use of its 1,400 pounds off direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials? Product C $85 20 32 3 55 $30
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer without copy paste and with all work like explanation , computation, formula with steps need correct and complete answer for better understanding please answer in text no AI no handwritten no image need accurate answer

Transcribed Image Text:Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those
products:
Selling price
Variable costs per unit:
Direct materials
Direct labor
Variable overhead
Total variable cost per unit
Contribution margin per unit
O
O
$14.00
$20.00
$15.00
Product A
$70
The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct material cost is $8.00 per
pound. The company has only 1,400 pounds of direct materials available for production. Assuming the company has made optimal use of its 1,400
pounds off direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials?
$16.00
16
40
2
58
$12
Product B Product C
$75
$85
**~**
$21
20
32
3
55
$30
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education