Question

Banfield Corporation makes three products that use compound W, the current constrained resource. Data concerning those products appear below: VP YI WX Selling price per unit $ 248.04 $ 230.66 $ 505.44 Variable cost per unit $ 190.71 $ 172.14 $ 388.80 Centiliters of compound W 3.90 3.80 8.10

Answer 1

B) YI, VP, WX

Step-by-step explanation:

VP YI WX

Selling price per unit

$248.04 $230.66 $505.44

Variable cost per unit

190.71 $172.14 $388.80

Contribution margin per unit

(Selling price - variable cost)

$57.33 $58.52 $116.64

The amount of the constrained resource that would be required to produce one unit

3.90 3.80 8.10

Therefore:

$57.33÷3.90=$14,70

$58.52÷3.80 =$15.40

$116.64÷8.10=$14.40

Therefore the Contribution margin per unit of the constrained resource would be

$14.70 $15.40 $14.40

Therefore the Ranking the products in order of their current profitability from most profitable to least profitable would be:

YI =$15.90

VP=$14.70

WX=$14.40

Which is YI VP WX