Chapter 10, Problem 7E

Exercise 23-11 Sales mix A1

Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, $5 uses 3 pounds of the material, and G9 uses 6 pounds of the material. Demand for all products is strong, but only 50,000 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. Orders for which product should be produced and filled first, then second, then third? Support your answer.

	K1	$5	G9
Selling price…………………………	$160	$112	$210
Variable costs……………………….	96	85	144

Check K1 contribution margin per pound, $16