Benoit company produces three products—a, b, and
c. data concerning the three products follow (per unit): product a b c selling price $ 80.00 $ 62.00 $ 81.00 variable expenses: direct materials 24.00 18.00 9.00 other variable expenses 24.00 25.40 43.65 total variable expenses 48.00 43.40 52.65 contribution margin $ 32.00 $ 18.60 $ 28.35 contribution margin ratio 40 % 30 % 35 % the company estimates that it can sell 800 units of each product per month. the same raw material is used in each product. the material costs $3 per pound with a maximum of 5,000 pounds available each month. required: 1. calculate the contribution margin per pound of the constraining resource for each product. 2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?

My answer is: Produce Product C first, then followed by Product A. to maximize contribution margin. Product B will not be produced since the maximum number of pounds has already been used in producing Products C and A.

PER UNIT
PRODUCT A B C
SELLING PRICE 80 62 81
VARIABLE EXPENSES
DIRECT MATERIALS 24 18 9
OTHER VAR EXP. 24 25.4 43.65
TOTAL VAR EXP 48 43.4 52.65
CONTRIBUTION MARGIN 32 18.6 28.35
CM RATIO   0.4 0.3 0.35

COMPANY CAN SELL 800 UNITS OF EACH PRODUCT PER MONTH.
SAME RAW MATERIAL IS USED IN EACH PRODUCT.
MATERIAL COSTS 3 PER POUND W/ A MAX OF 5,000 POUNDS EACH MONTH

PRODUCT DM UNIT COST   NO. OF LBS
A 24 3 8
B 18 3 6
C 9 3 3
PRODUCT NO. OF LBS/UNIT MAX UNITS TOTAL NO. OF LBS
A 8     800 6400
B 6 800 4800
C 3 800 2400
TOTAL    13600
LIMITATION: 5,000 POUNDS PER MONTH ONLY.

required:
1. calculate the contribution margin per pound of the constraining resource for each product.
2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?

PLS. SEE ATTACHMENTS FOR MY FULL COMPUTATIONS.