$12.$

Question $12$

Your company anticipates demand for $6000$ insulated lunch bags at a price of $$19$ and $2000$ bento bags at a price of $$22.$ The company has a capacity of $3200$ machine hours. Other information from the financial accounting system is listed below. How many insulated and bento bags should the company make?

Insulated lunch bag

Direct material

$$6\mathrm{.}28$

Direct labor

$$1\mathrm{.}01$

Manufacturing overhead: variable

$$1\mathrm{.}07$

Manufacturing overhead: fixed

$$0\mathrm{.}97$

Total manufacturing cost

$$9\mathrm{.}33$

Non$-$manufacturing overhead: variable

$$1\mathrm{.}11$

Non$-$manufacturing overhead: fixed

$$1\mathrm{.}24$

Total cost

$$11\mathrm{.}68$

Insulated lunch bag price

$$19\mathrm{.}00$

Machine hour

$0\mathrm{.}74$

Bento bag

Sales

$$22\mathrm{.}00$

Direct material

$$8\mathrm{.}23$

Direct labor

$$2\mathrm{.}14$

Manufacturing overhead: variable

$$1\mathrm{.}56$

Non$-$manufacturing overhead: variable

$$0\mathrm{.}89$

Total variable cost

$$12\mathrm{.}82$

Manufacturing overhead: fixed

$$1\mathrm{.}21$

Non$-$manufacturing overhead: fixed

$$0\mathrm{.}68$

Total fixed cost

$$1\mathrm{.}89$

Total cost

$$14\mathrm{.}71$

Bento bag price

$$22\mathrm{.}00$

Machine hour

$0\mathrm{.}57$

$1$ point

Make $6000$ insulated bags and $1752$ bento bags with the available machine hours.

Your company should make more bento bags because the profit margin per bento bag machine hour is higher than the profit margin per insulated bag machine hour.

Make $2784$ insulated bags and $2000$ bento bags with the available machine hours.

Make only bento bags with the available machine hours.