Chapter 13 Quiz

Chapter 13 Quiz - Curly $21 per unit/3 lbs unit = $7/lb 2...

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Accounting 2102 Spring 2008 Farmer Quiz 8 . . . Chapter 13 Name UGA MyID Signature and Date Please circle your FINAL answer in the spaces provided. Just For Laughs, Inc. manufactures three products, Larry, Moe, and Curly. Data concerning the three products on a per unit basis follow: Larry Moe Curly Selling Price $80 $56 $70 Direct Materials 24 15 9 Other Variable Expenses 24 27 40 Demand for the company’s products is very strong. The same material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available from the current supplier each month. 1. Compute the contribution margin per operational constraint for each product. Larry $32 per unit/8 lbs per unit = $4/lb Moe $14 per unit/5 lbs unit = $2.80/lb
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Unformatted text preview: Curly $21 per unit/3 lbs unit = $7/lb 2. Which product would you advise the company to fill orders for first? Curly (b/c highest CM per constraint) 3. Another supplier is willing to sell Just for Laughs additional pounds of material but at a substantial premium over Just for Laughs’s current cost. If there is unfilled demand for all three products, what is the highest price Just for Laughs should be willing to pay for an additional pound of material? Curly Selling Price $70 Direct Materials 30 =$30 per unit/3 lbs per unit = $10 per lb Other Variable Expenses 40 CM $0 Page 1 of 1 88a907aa09764c2ca87f20055016b0ea68bc53c4.doc...
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