Solution-Compute contribution margin per pound of materials

Compute contribution margin per pound of materials used

Reference no: EM13479050

Shelby Company produces three products: product X, product Y, and product Z. Data concerning the three products follow (per unit):

	Product X			Product Y			Product Z
Selling price	$	80		$	56		$	70

Variable expenses:
Direct materials		24.00			15.00			9.00
Labor and overhead		24.00			27.00			40.00

Total variable expenses		48.00			42.00			49.00

Contribution margin	$	32.00		$	14.00		$	21.00

Contribution margin ratio		40	%		25	%		30	%

Demand for the company's products is very strong, with far more orders each month than the company can produce with the available raw materials. The same material is used in each product. The material costs $3 per pound, with a maximum of 5,000 pounds available each month.

Required:

Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Reference no: EM13479050

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Compute contribution margin per pound of materials used

Reference no: EM13479050

Reference no: EM13479050

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