1 answer

Exercise 12-12 Volume Trade-Off Decisions (L012-5] Benoit Company produces three products-A, B, and C. Data concerning...

Question:

Exercise 12-12 Volume Trade-Off Decisions (L012-5] Benoit Company produces three products-A, B, and C. Data concerning the thComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the contributioComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Which orders would you adComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the maximum contr

Exercise 12-12 Volume Trade-Off Decisions (L012-5] Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): A $75.00 Product B $64.00 C $66.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 22.50 22.50 45.00 $30.00 40% 15.00 33.00 48.00 $16.00 25% 12.00 34.20 46.20 $19.80 30% The company estimates that it can sell 900 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,400 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials?
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the contribution margin per pound of the constraining resource for each product. (Round your answers to 2 decimal places.) Product A Product B Product C Contribution margin per pound of the constraining resource Required 1 Required 2 >
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? Product A Product B Product C < Required 1 Required 3 >
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials? (Round your intermediate calculations to 2 decimal places.) Maximum contribution margin < Required 2 Required 2 Required 3 Required 3 > >

Answers

A B C Total
Contribution margin per unit $30.00 $16.00 $19.80
Direct materials used per unit(in pound) 7.50 5.00 4.00
Contribution margin per pound $4.00 $3.20 $4.95
Ranking based on CM per pound II III I
So company should accept the order of product C then A and then B
Maximum Demand(in units) 900 900 900
Materials used to meet maximum demand 6750 4500 3600
Materials actually used based on constraint of 5400 pounds 1800 0 3600 5400
Maximum Contribution margin $54,000.00 $0.00 $71,280.00 $1,25,280.00
.

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