Baker Company manufactures three products: A, B and C. The selling price, variable costs and contribution margin for one unit of each product follow: Selling price Less: Variable expenses: Direct materials Direct labour Other variable expenses Total variable expenses Contribution margin Product B A $131.00 $180.00 21.00 14.20 63.50 98.70 $32.30 C $175.00 67.00 48.00 14.20 14.20 44.00 72.25 125.20 134.45 $54.80 $ 40.55 The same raw material is used in all three products and costs $4 per kilogram. Baker Company has only 8,500 kilograms of material on hand and will not be able to obtain any more material for several weeks due to a strike in its supplier's plant. Management is tryin to decide which product(s) to concentrate on next week in filling its backlog of orders. Direct labour costs $19 per hour. Required: 1. Compute the amount of contribution margin that will be obtained per kilogram of material used in each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Baker Company manufactures three products: A, B and C. The selling price, variable costs and contribution margin for one unit of each product follow: Selling price Less: Variable expenses: Direct materials Direct labour Other variable expenses Total variable expenses Contribution margin Product B A $131.00 $180.00 21.00 14.20 63.50 98.70 $32.30 C $175.00 67.00 48.00 14.20 14.20 44.00 72.25 125.20 134.45 $54.80 $ 40.55 The same raw material is used in all three products and costs $4 per kilogram. Baker Company has only 8,500 kilograms of material on hand and will not be able to obtain any more material for several weeks due to a strike in its supplier's plant. Management is tryin to decide which product(s) to concentrate on next week in filling its backlog of orders. Direct labour costs $19 per hour. Required: 1. Compute the amount of contribution margin that will be obtained per kilogram of material used in each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Baker Company manufactures three products: A, B and C. The selling price, variable costs and contribution margin for one unit of
each product follow:
Selling price
Less: Variable expenses:
Direct materials
Direct labour
Other variable expenses
Total variable expenses
Contribution margin
Product
B
A
$131.00 $180.00
21.00
67.00
14.20
14.20
63.50
44.00
98.70
125.20
$32.30 $ 54.80
C
$175.00
48.00
14.20
72.25
134.45
$40.55
The same raw material is used in all three products and costs $4 per kilogram. Baker Company has only 8,500 kilograms of material
on hand and will not be able to obtain any more material for several weeks due to a strike in its supplier's plant. Management is tryin
to decide which product(s) to concentrate on next week in filling its backlog of orders. Direct labour costs $19 per hour.
Required:
1. Compute the amount of contribution margin that will be obtained per kilogram of material used in each product. (Do not round
intermediate calculations. Round your answers to 2 decimal places.)
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