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Brown Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $17.30
| Brown Corporation makes four products in a single facility. These products have the following unit product costs: |
| Products | ||||
| A | B | C | D | |
| Direct materials | $17.30 | $21.20 | $14.20 | $16.90 |
| Direct labor | 19.30 | 22.70 | 17.10 | 11.10 |
| Variable manufacturing overhead | 6.10 | 7.30 | 9.80 | 6.80 |
| Fixed manufacturing overhead | 29.20 | 16.10 | 16.20 | 18.20 |
| Unit product cost | $71.90 | $67.30 | $57.30 | $53.00 |
Additional data concerning these products are listed below.
| Products | ||||
| A | B | C | D | |
| Grinding minutes per unit | 2.30 | 1.35 | 0.90 | 1.20 |
| Selling price per unit | $87.20 | $79.60 | $76.40 | $71.10 |
| Variable selling cost per unit | $3.05 | $3.75 | $4.50 | $5.20 |
| Monthly demand in units | 4,700 | 3,700 | 3,700 | 5,700.00 |
| The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company. |
Which product makes the MOST profitable use of the grinding machines?
Product A
Product B
Product D
Product C
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