Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Broyles Company makes four products in a single facility. These products have the following unit product costs: Product A B C D Direct materials $10.70
Broyles Company makes four products in a single facility. These products have the following unit product costs: Product A B C D Direct materials $10.70 $ 5.40 $ 5.10 $ 7.20 Direct labor 19.10 21.40 29.00 34.40 Variable manufacturing overhead 1.20 1.50 1.80 1.60 Fixed manufacturing overhead 22.40 16.00 15.00 17.60 Unit product cost $53.40 $44.30 $50.90 $60.80 Additional data concerning these products are listed below. Product A B C D Grinding minutes per unit 2.20 1.20 1.70 1.80 Selling price per unit $65.40 $58.50 $70.70 $76.20 Variable selling cost per unit $3.60 $3.80 $2.00 $3.40 Monthly demand in units 1,000 4,000 1,000 4,000 The grinding machines are potentially the constraint in the production facility. A total of 14,400 minutes are available per month on these machines. Required: A. Determine the minutes of grinding machine time that would be required to satisfy demand for all four products. B. Which product makes the LEAST profitable use of the grinding machines? C. Which product makes the MOST profitable use of the grinding machines? D. Up to how much should the company be willing to pay for one additional hour of grinding machine time if the company has made the best use of the existing grinding machine capacity? (Round off to the nearest whole cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started