Question: Products $ $ Selling price per unit Total variable costs per unit Contribution margin CM Ratio Kilograms of wood per unit Demand in units 800

 Products $ $ Selling price per unit Total variable costs per

Products $ $ Selling price per unit Total variable costs per unit Contribution margin CM Ratio Kilograms of wood per unit Demand in units 800 $ 480 $ 320 $ 40% 5 500 700 410 290 30% 1,000 Demand for the company's guitars is very strong, with far more orders on hand each month than the company has raw materials available. The same material (wood) is used in both types of guitars and costs $30.00 per kilogram with a maximum of 5,000 kilograms available each month. Required: a) How may kilograms of material would be required to satisfy demand? (2 marks) b) Which orders would you advise the company to accept first? Show work to support your decision. (2 marks) How much would the company be willing to pay for one additional kilogram of material in excess of the normal price if the company has already made the best use of the existing 5,000 kilograms. (2 marks)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

\f