Question
Broze Company makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $14.70
Broze Company makes four products in a single facility. These products have the following unit product costs:
| Products | ||||
| A | B | C | D | |
| Direct materials | $14.70 | $10.60 | $11.40 | $11.00 |
| Direct labor | 19.80 | 27.80 | 34.00 | 40.80 |
| Variable manufacturing overhead | 4.70 | 3.10 | 3.00 | 3.60 |
| Fixed manufacturing overhead | 26.90 | 35.20 | 27.00 | 37.60 |
| Unit product cost | $66.10 | $76.70 | $75.40 | $93.00 |
| Additional data concerning these products are listed below. |
| Products | ||||
| A | B | C | D | |
| Grinding minutes per unit | 4.20 | 5.70 | 4.70 | 3.80 |
| Selling price per unit | $76.50 | $93.90 | $87.80 | $104.60 |
| Variable selling cost per unit | $2.60 | $1.60 | $3.70 | $2.00 |
| Monthly demand in units | 4,400 | 4,400 | 3,400 | 2,400 |
| The grinding machines are potentially the constraint in the production facility. A total of 54,000 minutes are available per month on these machines. |
| Direct labor is a variable cost in this company. |
| How many minutes of grinding machine time would be required to satisfy demand for all four products? |
a. 68,660
b. 54,000
c. 16,080
d. 50,180
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
