Demand for the companys products is very strong with far

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Reference no: EM13594610

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 $ 70 $ 50 $ 60

Variable expenses:
Direct materials 21.00 15.00 4.20
Labor and overhead 21.00 22.50 37.80
Total variable expenses 42.00 37.50 42.00

Contribution margin $ 28.00 $ 12.50 $18.00
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 $5 per pound, with a maximum of 4,700 pounds available each month.

Required:

a. Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.)

Reference no: EM13594610

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