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serg [7]
3 years ago
8

Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.1 pound

s of the material, S5 uses 2.4 pounds of the material, and G9 uses 6.4 pounds of the material. Demand for all products is strong, but only 54,200 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.
K1 S5 G9
Selling price $147.39 $112.64 $215.56
Variable costs 95.00 92.00 149.00

Required:
Calculate the contribution margin per pound for each of the three products.
Business
1 answer:
photoshop1234 [79]3 years ago
7 0

Answer:

Contribution margin per pound

K1  - $16.90

S5 - $8.60

G9  - $10.40

Explanation:

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.

The contribution margin per pound for each of the three products is the ratio of the contribution margin per unit of a product to the number of pounds required per unit of that product.

                                           K1                  S5                        G9

Selling price                      $147.39        $112.64                 $215.56

Variable costs                     $95.00       $92.00                 $149.00

Contribution margin            $52.39       $20.64                 $66.56

Pounds per unit                       3.1                2.4                       6.4

Contribution margin/pound  $16.90       $8.60                   $10.40

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on the other hand, if the discount rate is less than 16%, the project should be accepted because the return of the project would be greater than the discount rate.

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You just won the Powerball and are offered two payment options: 1) Receiving $80 million per year for 25 years beginning at next
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Answer: $80 million per year for 25 years

Explanation:

The option you should choose is one that will guarantee you the highest present value.

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2 years ago
Assume a company makes only three products, B, C, and D:
Vsevolod [243]

Answer:

d) $13

Explanation:

contribution margin per unit:

  • product B = $45
  • product C = $39
  • product D = $25

contribution margin per machine hour:

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