4.Gloddy Company makes three products in a single facility. These products have the

following unit product costs:

Product A Product B Product C

Direct materials................................ $24.90 $25.70 $26.60

Direct labor....................................... 13.30 17.10 15.70

Variable manufacturing overhead .... 2.50 2.80 3.10

Fixed manufacturing overhead......... 19.80 27.70 21.00

Variable selling cost per unit............ 2.30 1.90 3.80

Mixing minutes per unit ................... 2.50 1.70 1.60

Selling price per unit ........................ $71.50 $87.90 $83.00

Monthly demand in units ................. 1,000 3,000 3,000

The mixing machines are potentially the constraint in the production facility. A total

of 10,800 minutes are available per month on these machines.

Required:

a. How many minutes of mixing machine time would be required to satisfy

demand for all three products?

b. How much of each product should be produced to maximize net operating

income? (Round off to the nearest whole unit.)

c. Up to how much should the company be willing to pay for one additional

hour of mixing machine time if the company has made the best use of the

existing mixing machine capacity? (Round off to the nearest whole cent.)