Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.2 pounds of the material, Ike uses 3.2 pounds of the material, and Bix uses 5.5 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 $143.96 95.00 Contribution margin per pound Ike $ 120.24 94.00 (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 $ 204.50 144.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.2 pounds of the material, Ike uses 3.2 pounds of the material, and Bix uses 5.5 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 $143.96 95.00 Contribution margin per pound Ike $ 120.24 94.00 (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 $ 204.50 144.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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