Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.9 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. Kin Ike Bix Selling price per unit $ 152.67 $ 118.66 $ 207.55 Variable costs per unit 93.00 92.00 141.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, lis
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.9 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. Kin Ike Bix Selling price per unit $ 152.67 $ 118.66 $ 207.55 Variable costs per unit 93.00 92.00 141.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, lis
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1Q: Define and explain contribution margin on a per unit basis.
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Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.9 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.
Kin | Ike | Bix | |
---|---|---|---|
Selling price per unit | $ 152.67 | $ 118.66 | $ 207.55 |
Variable costs per unit | 93.00 | 92.00 | 141.00 |
(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, lis
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