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kumpel [21]
3 years ago
15

Material is a scarce resource. The product uses four pounds of material. How much would the company be willing to pay for one mo

re pound of material
Business
1 answer:
miss Akunina [59]3 years ago
7 0

The amount that the company is willing to pay is $12.50.

<h3>What is CM per pounds?</h3>

CM per pounds means the Contribution margin per pounds that we will calculate below.

Particulars                     Amount

Selling price                   $125  

Less: Variable cost

Material                           $40  

Labor                   $22.5  

Variable cost                  <u>$12.5</u>  

CM per unit                     $50  

Divide: Pounds used       <u>$4</u>  

CM per pound          <u>$12.5</u>

In conclusion, the amount that the company is willing to pay is $12.50.

Read more about Contribution margin

<em>brainly.com/question/15684424</em>

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