Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4 pounds of the material, Ike uses 3.1 pounds of the material, and Bix uses 5.5 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Kin Ike Variable costs per unit $ 155.46 $ 115.28 98.00 Bix $194.10 88.00 138.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. + Product Contribution Margin Kin Ike Bix $ 115.46 $ 115.28 $ 194.10 98.00 88.00 138.00 $ 17.46 $ 27.28 $ 56.10 Sales Variable costs es Contribution margin per pound Order in which management should produce and meet demand: First Third Second

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4 pounds of the
material, Ike uses 3.1 pounds of the material, and Bix uses 5.5 pounds of the material. Selling price per unit and variable costs per unit
of each product follow.
Selling price per unit
Kin
Ike
Variable costs per unit
$ 155.46 $ 115.28
98.00
Bix
$194.10
88.00
138.00
(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in
which management should produce and meet demand.
+
Product Contribution Margin
Kin
Ike
Bix
$
115.46 $
115.28
$
194.10
98.00
88.00
138.00
$
17.46 $
27.28 $
56.10
Sales
Variable costs
es
Contribution margin per pound
Order in which management should produce and meet demand:
First
Third
Second
Transcribed Image Text:Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4 pounds of the material, Ike uses 3.1 pounds of the material, and Bix uses 5.5 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Kin Ike Variable costs per unit $ 155.46 $ 115.28 98.00 Bix $194.10 88.00 138.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. + Product Contribution Margin Kin Ike Bix $ 115.46 $ 115.28 $ 194.10 98.00 88.00 138.00 $ 17.46 $ 27.28 $ 56.10 Sales Variable costs es Contribution margin per pound Order in which management should produce and meet demand: First Third Second
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