Question 2 The same raw material is used in all three products. Barlow Company has only 4,600 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is tryingto decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $6 per pound.Required:1. Compute the amount of contribution margin that will be obtained per pound of material used in each product.ABContribution margin per unitDirect material cost per unitDirect material cost per poundPounds of material required per unitContribution margin per pound2a. Compute the amount of contribution margin on each product.ABContribution margin per poundPounds of material availableTotal contribution margin2b. Which orders would you recommend that the company work on next week-the orders for product A, product B, or product C?O Product AO Product BO Product C Exercise 7-8 Utilization of a Constrained Resource [LO7-5, L07-6]Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:ProductAВC$300Selling priceVariable expenses:Direct materialsOther variable expensesTotal variable expenses$440$360306636150154198180220234Contribution margin$120$220$126Contribution margin ratio40%50%35%The same raw material is used in all three products. Barlow Company has only 4,600 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is tryingto decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $6 per pound.Required:1. Compute the amount of contribution margin that will be obtained per pound of material used in each product.ABContribution margin per unitDirect material cost per unitDirect material cost per poundPounds of material required per unitContribution margin per pound

Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

The same raw material is used in all three products. Barlow Company has only 4,600 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is tryin to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $6 per pound. Required: 1. Compute the amount of contribution margin that will be obtained per pound of material used in each product. B Contribution margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound 2a. Compute the amount of contribution margin on each product. A B Contribution margin per pound Pounds of material available Total contribution margin 2b. Which orders would you recommend that the company work on next week-the orders for product A, product B, or product C? O Product A O Product B O Product C

The same raw material is used in all three products. Barlow Company has only 4,600 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is tryin to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $6 per pound. Required: 1. Compute the amount of contribution margin that will be obtained per pound of material used in each product. B Contribution margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound 2a. Compute the amount of contribution margin on each product. A B Contribution margin per pound Pounds of material available Total contribution margin 2b. Which orders would you recommend that the company work on next week-the orders for product A, product B, or product C? O Product A O Product B O Product C

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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