Check my work Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: 17 Selling price Variable costs per unit: Direct materials Direct labor Variable overhead Total variable cost per unit Contribution margin per unit Product A Product B Product C $ 70 $ 75 $ 85 16 24 20 40 28 32 2 2 3 58 54 55 $ 12 $ 21 $ 30 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct materia cost is $8.00 per pound. The company has only 3,000 pounds of direct materials available for production. Assuming the company has made optimal use of its 3,000 pounds of direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials? Multiple Choice О $16.00 $20.00
Check my work Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information with respect to those products: 17 Selling price Variable costs per unit: Direct materials Direct labor Variable overhead Total variable cost per unit Contribution margin per unit Product A Product B Product C $ 70 $ 75 $ 85 16 24 20 40 28 32 2 2 3 58 54 55 $ 12 $ 21 $ 30 The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct materia cost is $8.00 per pound. The company has only 3,000 pounds of direct materials available for production. Assuming the company has made optimal use of its 3,000 pounds of direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials? Multiple Choice О $16.00 $20.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Check my work
Assume that a company makes three products-Product A, Product B, and Product C-and provides the following information
with respect to those products:
17
Selling price
Variable costs per unit:
Direct materials
Direct labor
Variable overhead
Total variable cost per unit
Contribution margin per unit
Product A
Product B
Product C
$ 70
$ 75
$ 85
16
24
20
40
28
32
2
2
3
58
54
55
$ 12
$ 21
$ 30
The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct materia
cost is $8.00 per pound. The company has only 3,000 pounds of direct materials available for production. Assuming the
company has made optimal use of its 3,000 pounds of direct material, what is the maximum amount per pound the company
should be willing to pay for additional direct materials?
Multiple Choice
О
$16.00
$20.00
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