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 | $ | 14.40 | $ | 10.30 | $ | 11.10 | $ | 10.70 |
| Direct labor | 19.50 | 27.50 | 33.70 | 40.50 | ||||
| Variable manufacturing overhead | 4.40 | 2.80 | 2.70 | 3.30 | ||||
| Fixed manufacturing overhead | 26.60 | 34.90 | 26.70 | 37.30 | ||||
| Unit product cost | $ | 64.90 | $ | 75.50 | $ | 74.20 | $ | 91.80 |
Additional data concerning these products are listed below.
| Products | ||||||||
| A | B | C | D | |||||
| Grinding minutes per unit | 3.90 | 5.40 | 4.40 | 3.50 | ||||
| Selling price per unit | $ | 76.20 | $ | 93.60 | $ | 87.50 | $ | 104.30 |
| Variable selling cost per unit | $ | 2.30 | $ | 1.30 | $ | 3.40 | $ | 1.70 |
| Monthly demand in units | 4,100 | 4,100 | 3,100 | 2,100 | ||||
The grinding machines are potentially the constraint in the production facility. A total of 53,700 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?
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Financial Accounting Theory
Authors: Craig Deegan
3rd Edition
0070277265, 978-0070277267
