Selling price $
1 answer:
Answer:
<h2><u>Requirement 1: </u></h2><h3><u>Calculate the contribution margin per pound of the constraining resource for each product.</u></h3>Contribution margin per Pound of Raw material:
Product A: $4.00
Product B: $2.50
Product C: $7.40
<h2><u>Requirement 2:</u></h2><h3><u>Which orders would you advise the company to accept first, those for A, B, or C?</u></h3>Product ranking:
Product C: (I)
Product A: (II)
Product B: (III)
<h2><u>Requirement 3:</u></h2><h3><u>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?</u></h3>Maximum contribution = $29,250
Explanation:
Workings are attached in the tabular form.
Note: The product with highest contribution margin per pound of raw material should be made first .
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