Question
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 | $ | 13.30 | $ | 9.20 | $ | 10.00 | $ | 9.60 |
| Direct labor | 18.40 | 26.40 | 32.60 | 39.40 | ||||
| Variable manufacturing overhead | 3.30 | 1.70 | 1.60 | 2.20 | ||||
| Fixed manufacturing overhead | 25.50 | 33.80 | 25.60 | 36.20 | ||||
| Unit product cost | $ | 60.50 | $ | 71.10 | $ | 69.80 | $ | 87.40 |
Additional data concerning these products are listed below.
| Products | ||||||||
| A | B | C | D | |||||
| Grinding minutes per unit | 2.80 | 3.60 | 3.30 | 2.40 | ||||
| Selling price per unit | $ | 75.10 | $ | 92.50 | $ | 86.40 | $ | 103.20 |
| Variable selling cost per unit | $ | 1.20 | $ | 0.20 | $ | 2.30 | $ | 0.60 |
| Monthly demand in units | 3,000 | 3,000 | 2,000 | 2,200 | ||||
The grinding machines are potentially the constraint in the production facility. A total of 52,700 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?
Multiple Choice
-
6,700
-
52,700
-
31,080
-
22,680
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Essentials of Accounting for Governmental and Not-for-Profit Organizations
Authors: Paul A. Copley
10th Edition
007352705X, 978-0073527055
