Answer:
The contribution per pound for K1, S5, and G9 is $64 per pound, $27 per pound, and $66 per pound respectively.
Explanation:
The contribution margin shows a difference between selling price per unit and the variable cost per unit.
In equation, it is displayed below:
Contribution per unit = Selling price per unit - Variable cost per unit
Since, in the question we have to calculate the contribution margin per pound for each of the three products. So by using the above equation, the calculation can be made which is shown below:
Contribution margin per pound for Product K1
= K1 Selling price per pound - K1 Variable cost per pound
= $160- $96
= $64 per pound
Contribution margin per pound for Product S5
= S5 Selling price per pound - S5 Variable cost per pound
= $112- $85
=$27 per pound
Contribution margin per pound for Product G9
= G9 Selling price per pound - G9 Variable cost per pound
= $210- $144
=$66 per pound
Other costs and production level is immaterial while calculating contribution margin for these three products.
Hence, the contribution per pound for K1, S5, and G9 is $64 per pound, $27 per pound, and $66 per pound respectively.
