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Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Products | ||||||||
A | B | C | D | |||||
Direct materials | $ | 15.00 | $ | 10.90 | $ | 11.70 | $ | 11.30 |
Direct labor | 20.10 | 28.10 | 34.30 | 41.10 | ||||
Variable manufacturing overhead | 5.00 | 3.40 | 3.30 | 3.90 | ||||
Fixed manufacturing overhead | 27.20 | 35.50 | 27.30 | 37.90 | ||||
Unit product cost | $ | 67.30 | $ | 77.90 | $ | 76.60 | $ | 94.20 |
Additional data concerning these products are listed below.
Products | ||||||||
A | B | C | D | |||||
Grinding minutes per unit | 4.50 | 6.00 | 5.00 | 4.10 | ||||
Selling price per unit | $ | 76.80 | $ | 94.20 | $ | 88.10 | $ | 104.90 |
Variable selling cost per unit | $ | 2.90 | $ | 1.90 | $ | 4.00 | $ | 2.30 |
Monthly demand in units | 4,700 | 4,700 | 3,700 | 2,700 | ||||
The grinding machines are potentially the constraint in the production facility. A total of 54,300 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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