elling price ariable expenses: Direct materials Other variable expenses tal variable expenses intribution margin $ 80.00 24.00 24.00 48.00 $ 32.00 $ 54.00 18.00 25.20 43.20 10.80
elling price ariable expenses: Direct materials Other variable expenses tal variable expenses intribution margin $ 80.00 24.00 24.00 48.00 $ 32.00 $ 54.00 18.00 25.20 43.20 10.80
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku

Transcribed Image Text:Inc. produces Products
Selling price
Variable expenses:
Direct materials
Other variable expenses
Total variable expenses
Contribution margin
Contribution margin ratio
$ 20,400
$34,800
$14,400
11273
$ 37,300
$ 80.00
24.00
24.00
48.00
$ 32.00
40%
The following table provides per unit information relating to the three products:
Product
$ 54.00
18.00
25.20
43.20
$10.80
20%
$ 80.00
has enough demand to sell 850 units of each product per month. Each product requires the same direct materials in its
production. The direct materials cost $3 per pound. The company will at most have 7,000 pounds of the direct materials available
every month.
What is the maximum contribution margin that
can earn per month using its 7,000 pounds of direct materials optimally?
12.00
44.00
56.00
$ 24.00
30%
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