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A B D E F G H | Gabby Inc. produces three products. Data concerning the selling prices and unit costs of the three products
A B D E F G H | Gabby Inc. produces three products. Data concerning the selling prices and unit costs of the three products appear below: S Product A B 70 $ 50 $ 45 $ 35 $ 23 $ 6 $ 80 S Selling price Variable costs Fixed costs Grinding machine time (minutes) 50 $ 20 7 9 3 1 Fixed costs are applied to the products on the basis of direct labor hours. 2 Demand for the three products exceed the company's productive capacity. 3. The grinding machine is the constraint with only 2,400 minutes of grinding time available per 4 week. 5 6 Required: 7 a) Given the grinding machine constraint, which product should be emphasized? Support 8 your answer with appropriate calculations 9 0 b) Assuming that there is still unfilled demand for the product that the company should 1 emphazie in part (a) above, up to how much should the company be willing to pay for an 2 additional hour of grinding machine time? 3 24 25 26 - stw WN
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