Question
Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products Direct materials Direct labor Variable manufacturing overhead
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Products
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Unit product cost
A
B
$ 13.40 $ 9.30 $ 10.10
18.50
26.50
32.70
3.40
1.80
1.70
25.60
33.90
25.70
D
$ 9.70
39.50
2.30
36.30
$ 60.90 $ 71.50 $ 70.20 $ 87.80
Additional data concerning these products are listed below.
Products
Grinding minutes per unit
Selling price per unit
Variable selling cost per unit
Monthly demand in units
A
B
D
2.90
3.80
3.40
2.50
$ 75.20 $ 92.60 $ 86.50 $ 103.30
$ 1.30
$ 0.30
$ 2.40
$ 0.70
3,100
3,100
2,100
2,300
The grinding machines are potentially the constraint in the production facility. A total of 52,800 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?
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