Benoit Company produces three products, A, B , and C . Data concerning the three products follow (per unit):
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.
Which orders would you advise the company to accept first, those for A , for B , or for C ? Which orders second? Third?

Question

23-08-2022
Business

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Benoit Company produces three products, A, B , and C . Data concerning the three products follow (per unit):
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.
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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qwcherry qwcherry · Answer 1 · 2022-08-26T08:12:49+02:00

In this task, we are asked to research the given problem and advice the corporate on which orders should they accept so as. so as to try to do that, we've got to calculate the contribution margin of every product.

Contribution margin per pound Product A = $4.00 Product B = $2.80 Product C = $7.00 2. Orders for product C should be accepted first as they yield the best contribution margin, followed by product A, then Product B which has the second highest and least contribution margin respectively.

Given the subsequent ;other variable expenses 24 27 40 total variable expenses 48 42 49 contribution margin $ 32 $ 14 $ 21 contribution margin ratio 40 Annunciation metal %.

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