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Barlow company manufactures three products a b and c

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Reference no: EM131015542

Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: 

 

Product
 

A

  

B

  

C

Selling price

$

240

    

$

360

    

$

320

  
                       

Variable expenses:

                      

Direct materials

  

24

      

72

      

32

  

Other variable expenses

  

120

      

108

      

176

  
                       

Total variable expenses

  

144

      

180

      

208

  
                       

Contribution margin

$

96

    

$

180

    

$

112

  
                       

Contribution margin ratio

  

40

%

    

50

%

    

35

%
                       
 

The same raw material is used in all three products. Barlow Company has only 4,400 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier’s plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound.

Required: 1a - Compute the amount of contribution margin that 

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Reference no: EM131015542

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