Question
Brain Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $
Brain Corporation makes four products in a single facility. These products have the following unit product costs:
Products | ||||||||
A | B | C | D | |||||
Direct materials | $ | 13.70 | $ | 9.60 | $ | 10.40 | $ | 10.00 |
Direct labor | 18.80 | 26.80 | 33.00 | 39.80 | ||||
Variable manufacturing overhead | 3.70 | 2.10 | 2.00 | 2.60 | ||||
Fixed manufacturing overhead | 25.90 | 34.20 | 26.00 | 36.60 | ||||
Unit product cost | 62.10 | 72.70 | 71.40 | 89.00 | ||||
Additional data concerning these products are listed below.
Products | ||||||||
A | B | C | D | |||||
Blending minutes per unit | 3.20 | 4.40 | 3.70 | 2.80 | ||||
Selling price per unit | $ | 75.50 | $ | 92.90 | $ | 86.80 | $ | 103.60 |
Variable selling cost per unit | $ | 1.60 | $ | 0.60 | $ | 2.70 | $ | 1.00 |
Monthly demand in units | 3,400 | 3,400 | 2,400 | 2,600 | ||||
The blending machines are potentially the constraint in the production facility. A total of 41,800 minutes are available per month on these machines.
Direct labor is a variable cost in this company. Included in the Variable manufacturing overhead per unit above is $0.10 per hour of blending time.
Up to how much should the company be willing to pay for one additional minute of blending machine time if the company has made the best use of the existing blending machine capacity?(Round your intermediate calculations to 2 decimal places.)
Group of answer choices
$17.93
$13.97
$10.56
$10.46
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