25Exercise 13-12 (Static) Volume Trade-Off Decisions [LO13-5]Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit):ProductB$56Selling priceVariable expenses:Direct materials.Other variable expensesTotal variable expenses.Contribution marginContribution margin ratioA$ 80242448$3240%152742$ 1425%С$7094049$2130%The company estimates that it can sell 800 units of each product per month. The same raw material is used in each product. Thematerial costs $3 per pound with a maximum of 5,000 pounds available each month.Required:1. Calculate the contribution margin per pound of the constraining resource for each product.2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third?3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds ofmaterials?

Contribution Margin - The contribution margin represents the incremental money generated for each…

Answered: Benoit Company produces three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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