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 | $ | 16.70 | $ | 20.60 | $ | 13.60 | $ | 16.30 |
| Direct labor | 18.70 | 22.10 | 16.50 | 10.50 | ||||
| Variable manufacturing overhead | 5.50 | 6.70 | 9.20 | 6.20 | ||||
| Fixed manufacturing overhead | 28.60 | 15.50 | 15.60 | 17.60 | ||||
| Unit product cost | $ | 69.50 | $ | 64.90 | $ | 54.90 | $ | 50.60 |
Additional data concerning these products are listed below.
| Products | ||||||||
| A | B | C | D | |||||
| Grinding minutes per unit | 2.00 | 1.05 | 0.60 | 0.90 | ||||
| Selling price per unit | $ | 84.20 | $ | 76.60 | $ | 73.40 | $ | 68.10 |
| Variable selling cost per unit | $ | 2.45 | $ | 3.15 | $ | 3.90 | $ | 4.60 |
| Monthly demand in units | 4,100 | 3,100 | 3,100 | 5,100 | ||||
The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Which product makes the MOST profitable use of the grinding machines? (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
Product C
Product D
Product B
Product A
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Introduction To Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
6th Canadian Edition
1260060411, 9781260060416
