Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the material, Ike uses 2.8 pounds of the material, and Bix uses 6.9 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 $ 171.32 104.00 Contribution margin per pound Ike $111.80 88.00 (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. Bix $ 217.14 144.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please do not give solution in image format thanku 

Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the
material, Ike uses 2.8 pounds of the material, and Bix uses 6.9 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.
xin
Ike
Bix
$ 171.32 $ 111.80 $ 217.14
104.00
88.00
144.00
(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.
Contribution margin per pound
Product Contribution Margin
Order in which management should produce and meet demand:
Kin
Ike
Bix
Transcribed Image Text:Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.4 pounds of the material, Ike uses 2.8 pounds of the material, and Bix uses 6.9 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. xin Ike Bix $ 171.32 $ 111.80 $ 217.14 104.00 88.00 144.00 (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. Contribution margin per pound Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education