Question
Bruce Corporation makes four products in a single facility. These products have the following unit product costs: ProductsABCDDirect materials$14.00$9.90$10.70$10.30Direct labor19.1027.1033.3040.10Variable manufacturing overhead4.002.402.302.90Fixed manufacturing overhead26.2034.5026.3036.90Unit product
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
ProductsABCDDirect materials$14.00$9.90$10.70$10.30Direct labor19.1027.1033.3040.10Variable manufacturing overhead4.002.402.302.90Fixed manufacturing overhead26.2034.5026.3036.90Unit product cost$63.30$73.90$72.60$90.20
Additional data concerning these products are listed below.
ProductsABCDGrinding minutes per unit3.505.004.003.10Selling price per unit$75.80$93.20$87.10$103.90Variable selling cost per unit$1.90$0.90$3.00$1.30Monthly demand in units3,7003,7002,7002,900
The grinding machines are potentially the constraint in the production facility. A total of 53,400 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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