Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.4 pounds of the material, S5 uses 3.2 pounds of the material, and G9 uses 6.1 pounds of the material.

Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.4 pounds of the material, S5 uses 3.2 pounds of the material, and G9 uses 6.1 pounds of the material. Demand for all products is strong, but only 49,300 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.
 

	K1				S5				G91
Selling price	$	160.78			$	115.88			$	213.54
Variable costs		104.00				89.00				144.00

Required:
1. Calculate the contribution margin per pound for each of the three products.

Explanation

1.

	K1				S5				G9
Selling price	$	160.78			$	115.88			$	213.54
Variable costs per unit		104.00				89.00				144.00
Contribution margin per unit		56.78				26.88				69.54
Pounds of material required	÷	3.40			÷	3.20			÷	6.10
Contribution margin per pound	$	16.70			$	8.40			$	11.40