Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.2 pounds of the material, Ike uses 2.8 pounds of the material, and Bix uses 6.4 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 $ 170.82 99.00 Contribution margin per unit Pounds per unit Contribution margin per pound Ike $ 109.24 56.00 (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 $ 212.92 147.00 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 4.2 pounds of the material, Ike uses 2.8 pounds of the material, and Bix uses 6.4 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 $ 170.82 99.00 Contribution margin per unit Pounds per unit Contribution margin per pound Ike $ 109.24 56.00 (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 $ 212.92 147.00 Product Contribution Margin Order in which management should produce and meet demand Kin Ike Bix
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 65P: Product Mix Decision, Single Constraint Norton Company produces two products (Juno and Hera) that...
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