Calculate the contribution margin per kg for products

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Reference no: EM133346976

Question: Wechsler Ltd produces three products: A130, B324, and C587. All three products use the same direct material, Brac. Unit data for the three products are

PRODUCT
	A130	B324	C587
SELLING PRICE	$252	$168	$210
VARIABLE COST
DIRECT MATERIAL	$72	$45	$27
LABOR AND OTHER COST	$84	$81	$120

QUANTITY OF BRAC PER UNIT	8KG	5KG	3KG

The demand for the products far exceeds the direct materials available to produce the products. Brac costs $9 per kilogram and a maximum of 5,000 kilograms is available each month. Wechsler must produce a minimum of 200 units of each product

REQUIRED

1. Calculate the contribution margin per kg for products A130, B324, and C587.

2. How many units of product A130, B324 and C587 should Wechsler produce?

3. Based on your answer in (2), calculate the contribution margins for product A130, B324, and C587 .

Reference no: EM133346976

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