The same raw material is used in all three products Barlow Company has only 11,000 Kilograms of material on hand and will not be able to obtain any more material for several weeks due to a strike in its supplier's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders the material coasts $4 per kilogram.

Required:
1. Compute the amount of contribution margin that wit be obtained per kilogram of material used in each product
2. Which orders would you recommend that the company work on next week - the orders for product A, product B, or Product C,
3. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. If there is unfilled demand for all three products, what is the highest price that Barlow Company should be willing to pay for an additional kilogram of materials?

Product A B. $205 Selling price $ 126 $ 180 %$4 Less: Variable expenses: Direct materials Other variable expenses 15.60 84 39 64 71.00 72.60 Total variable expenses 88.20 123 135.00 Contribution margin $ 82 $37.80 $ 45.00 Contribution margin ratio 30% 40% 25%