Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 51 pounds of the material, Ike uses 2.5 pounds of the material, and Bix uses 5.3 pounds of the material. Selling price per unit and variable costs per u of each product follow. Selling price per unit Variable costs per unit Kin $184.58 104.00 Ike $117.00 95.00 Bix $198.12 143.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order which management should produce and meet demand. Product Contribution Margin Kin Ike Bix
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 51 pounds of the material, Ike uses 2.5 pounds of the material, and Bix uses 5.3 pounds of the material. Selling price per unit and variable costs per u of each product follow. Selling price per unit Variable costs per unit Kin $184.58 104.00 Ike $117.00 95.00 Bix $198.12 143.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order which management should produce and meet demand. Product Contribution Margin Kin Ike Bix
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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![Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 5,1 pounds of the
material, Ike uses 2.5 pounds of the material, and Bix uses 5.3 pounds of the material. Selling price per unit and variable costs per unit
of each product follow.
Selling price per unit
Variable costs per unit
Kin
$184.58
104.00
Ike
$ 117.00
95.00
Bix
$198.12
143.00
(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in
which management should produce and meet demand
Product Contribution Margin
Contribution margin per pound
Order in which management should produce and meet demand
Kin
Ike
Bix](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42c1a7d5-eddb-4543-8d31-9149ae65cc6b%2F2e377c7c-49bc-401e-8753-92c8aa4e6557%2Fm6bb05_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 5,1 pounds of the
material, Ike uses 2.5 pounds of the material, and Bix uses 5.3 pounds of the material. Selling price per unit and variable costs per unit
of each product follow.
Selling price per unit
Variable costs per unit
Kin
$184.58
104.00
Ike
$ 117.00
95.00
Bix
$198.12
143.00
(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in
which management should produce and meet demand
Product Contribution Margin
Contribution margin per pound
Order in which management should produce and meet demand
Kin
Ike
Bix
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