Question: Need help on this question. Thank you AE 1 -Evaluate production constraint decisions using quantitative factors and assess special order decisions Rainbow Company produces the
Need help on this question. Thank you

AE 1 -Evaluate production constraint decisions using quantitative factors and assess special order decisions Rainbow Company produces the following types of paint: Fixed manufacturing costs are $1,400,000 for the month (a) Compute the contribution margin per can of each type of paint and the weighted contribution margin (b) Compute the contribution margin per direct material W. Determine which type of paint will have the highest contribution margin per direct material W (c) What is the breakeven number of cans per month? Show the breakeven quantity by the type of paint (d) Total production capacity =80,000 cans per month for all types of paint Current production of BLUE paint in a month =13,000 cans Rainbow Company receives a special order from Wonder Company to purchase 2,000 cans of SKY BLUE paint at $45.00 per can. In order to produce SKY BLUE paint, Rainbow Company will need to add a chemical Z to the production of BLUE paint. Chemical Z costs $4.00perkg and 2kg of Chemical Z is required to produce a can of SKY BLUE paint Should Paint Company accept this special order
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
