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  3. benoit company produces three products, a, b, and

Benoit Company produces three products, A, B, and C. Data concerning the three products follow...

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Accounting

Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit):

Product
A B C
Selling price $ 110 $ 90 $ 100
Variable expenses:
Direct materials 33.00 27.00 7.00
Other variable expenses 33.00 40.50 63.00
Total variable expenses 66.00 67.50 70.00
Contribution margin $ 44.00 $ 22.50 $ 30.00
Contribution margin ratio 40 % 25 % 30 %

Demand for the companys 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 $8 per pound with a maximum of 5,700 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.)

b.

Which orders would you advise the company to accept first, those for A, for B, or for C? Which orders second? Third?

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