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3 years ago

Selling price $

Business

1 answer:

Kipish [7]3 years ago

5 0

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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