Benoit Company produces three productsA, B, and C. Data concerning the three products follow (per unit):ProductABCSelling price$ 80$ 56$ 70Variable expenses: Direct materials24159Other variable expenses242740Totalvariable expenses484249 Contribution margin$ 32$ 14$ 21 Contribution margin ratio40 % 25% 30% The companyestimates 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 thecontribution margin per pound of the constraining resource for each product.2. Which orders would you advise thecompany to accept first, those for A, B, or C? Which orders second? Third?3. What is the maximum contribution marginthat the company can earn per month if it makes optimal use of its 5,000 pounds of materials?

Lets understand the basics.Contribution margin is a margin generated on sale of each and every unit.…

Answered: Benoit Company produces three…

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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Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 8 Traceable fixed manufacturing overhead 17 13 16 $ 105 Alpha Beta The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. $12 20 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Beta 19 9 11 $ 77
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.50 Direct labor $ 3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.50 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? (Round your "per unit" answer to 2 decimal places.) __________________________________________________________________________________________ Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per…
Dhapa
Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 Beta $ 15 30 30 18 16 26 29 23 19 26 21 $ 163 $ 130 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. oundational 11-13 (Algo) . Assume that Cane's customers would buy a maximum of 91,000 units of Alpha and 71,000 units of Beta. Also assume that the raw aterial available for production is limited to 225,000 pounds. How many units of…
Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $15 30 18 26 23 26 $ 163 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company's total amount of common fixed expenses? Total common fixed expenses 30 16 29 19 21 $ 130
Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $ 92.00 $ 66.00 $ 82.00 Variable expenses: Direct materials 27.60 18.00 12.00 Other variable expenses 27.60 31.50 45.40 Total variable expenses 55.20 49.50 57.40 Contribution margin $ 36.80 $ 16.50 $ 24.60 Contribution margin ratio 40% 25% 30% The company estimates that it can sell 950 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 6,100 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 6,100 pounds of materials?
Dinesh Bhai
Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.) Contribution margin per pound Alpha Beta $ 40 $ 15 30 30 18 16 26 29 23 19 26 21 $ 163 $ 130 Alpha Beta
Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, Its unit costs are as follows: Anount Per Unit $ 6.00 $ 3.5e $ 1.5e $ 4.00 $ 3.00 $ 2.00 $ 1.00 $ 8.50 Direct naterials Direct labour Variable manufacturing overhead Fixed nanufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable adninistrative expense Required: 12-a. If 12,500 units are produced, what Is the total amount of manufacturing overhead cost Incurred to support this level of production? Total manufacturing overhead cost 12-b. If 12,500 units are produced, what is this total amount expressed on a per unit basis? (Round your answer to 2 decimal places.) Manufacturing overhead per unit
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.50 Direct labor $ 4.00 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 9. If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $6.20 $ 3.70 $ 1.60 $ 4.00 $3.20 $ 2.20 $ 1.20 $ 0.45 Foundational 1-3 (Algo) 3. If 8,000 units are produced and sold, what is the variable cost per unit produced and sold? Note: Round your answer to 2 decimal places.
Meman

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