Business, 11.03.2020 03:05 kaizodude

Barlow Company manufactures three products—A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

Product
A B C
Selling price $ 180 $ 270 $ 240
Variable expenses:
Direct materials 24 80 32
Other variable expenses 102 90 148
Total variable expenses 126 170 180
Contribution margin $ 54 $ 100 $ 60
Contribution margin ratio 30 % 37 % 25 %
The same raw material is used in all three products. Barlow Company has only 6,000 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 trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound.

Required:

1. Calculate the contribution margin per pound of the constraining resource for each product.

2. Assuming that Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?

3. Assuming that Barlow’s estimated customer demand is 500 units per product line, what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?

4. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. Assuming Barlow’s estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw material in an optimal fashion, what is the highest price Barlow Company should be willing to pay for an additional pound of materials?

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 21:50

Required: 1-a. the marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000. calculate the increase or decrease in net operating income. 1-b. should the advertising budget be increased ? yes no hintsreferencesebook & resources hint #1 check my work 8.value: 1.00 pointsrequired information 2-a. refer to the original data. management is considering using higher-quality components that would increase the variable expense by $2 per unit. the marketing manager believes that the higher-quality product would increase sales by 10% per month. calculate the change in total contribution margin. 2-b. should the higher-quality components be used? yes no

Answers: 1

Answer

Business, 23.06.2019 09:00

In command economy, who makes production decisions? a. workers b. producers c. consumers d. the government

Answers: 1

Answer

Business, 23.06.2019 10:20

Which theorem states that no two species competing for the exact same resources can coexist? which theorem states that no two species competing for the exact same resources can coexist? resource partitioning principle complex community network principle dominance species principle competitive exclusion principle?

Answers: 3

Answer

Business, 23.06.2019 15:30

Bill is 31 years old, married, and lived with his spouse michelle from january 2018 to september 2018. bill paid all the cost of keeping up his home. he indicated that he is not legally separated and he and michelle agreed they will not a file a joint return. bill has an 8-year-old son, daniel, who qualifies as bill's dependent. bill worked as a clerk and his wages are $20,000 for 2018. his income tax before credits is $500. in 2018, he took a computer class at the local university to improve his job skills. bill has a receipt showing he paid $1,200 for tuition. he paid for all his educational expenses and did not receive any assistance or reimbursement. bill does not have enough deductions to itemize. bill, michelle, and daniel are u.s. citizens with valid social security numbers. 8. bill does not qualify to claim which of the following: a. head of household b. education benefit c. earned income credit d. all of the above

Answers: 3

Answer

You know the right answer?

Barlow Company manufactures three products—A, B, and C. The selling price, variable costs, and contr...

Questions