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    Thorne Company: Contribution margin by product

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    Thorne Company manufactures and sells three products. Relevant per unit data concerning each product are given below.
    Product
    A B C
    Selling price $8.96 $11.82 $16.22
    Variable costs and expenses $2.72 $9.54 $11.72
    Machine hours to produce 2 1 3

    Compute the contribution margin per unit of the limited resource (machine hour) for each product. (Round answers to 2 decimal places, e.g. 10.50.)

    Product A $

    Product B $

    Product C $

    Assuming 2,100 additional machine hours are available, which product should be manufactured?

    Complete the analysis showing the total contribution margin if the additional hours are (1) divided equally among the products, and (2) allocated entirely to the product identified in (b) above. (Round contribution margin to 2 decimal places, e.g. 10.50.)

    Divided equally among the products:
    Product
    A B C
    Machine hours

    Contribution margin per unit
    of limited resource $
    $
    $

    Total contribution margin $
    $
    $

    The total contribution margin is $ .
    Allocated entirely to the product identified in the section above.

    Machine hours

    Contribution margin per unit of limited resource $

    Total contribution margin $

    © BrainMass Inc. brainmass.com June 4, 2020, 1:27 am ad1c9bdddf
    https://brainmass.com/business/accounting/thorne-company-contribution-margin-by-product-401254

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    Solution Summary

    The solution computes Thorne Company's Contribution margin by product.

    $2.19

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