Question: A foreign supplier could furnish Barlow with additonal stocks of the raw material at a substancial premiun over the usual price. Assuming Barlow's estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw material in an optimal fashion. What is the highest price Barlow Company should be willing to pay for an additional pound of materials? Explain. *please help me with the explanation also, thank you Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:ProductACSelling price$180$270$240Variable expenses:Direct materials248032Other variable expenses10290148Total variable expenses126170180Contribution margin$ 54$ 100$ 60Contribution margin ratio30%37%25%The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it for severalweeks due to a strike in its supplier's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs$8 per pound.

Name: Question: A foreign supplier could furnish Barlow with additonal stock
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Description: Question: A foreign supplier could furnish Barlow with additonal stocks of the raw material at a substancial premiun over the usual price. Assuming Barlow's estimated customer demand is 500 units per product line and that the company has used its 6,0

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Answered: Barlow Company manufactures three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Question: A foreign supplier could furnish Barlow with additonal stocks of the raw material at a substancial premiun over the usual price. Assuming Barlow's estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw material in an optimal fashion. What is the highest price Barlow Company should be willing to pay for an additional pound of materials? Explain.

*please help me with the explanation also, thank you

Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:
Product
A
C
Selling price
$180
$270
$240
Variable expenses:
Direct materials
24
80
32
Other variable expenses
102
90
148
Total variable expenses
126
170
180
Contribution margin
$ 54
$ 100
$ 60
Contribution margin ratio
30%
37%
25%
The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it for several
weeks due to a strike in its supplier's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs
$8 per pound.

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