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 | $ | 16.90 | $ | 20.80 | $ | 13.80 | $ | 16.50 |
Direct labor | 18.90 | 22.30 | 16.70 | 10.70 | ||||
Variable manufacturing overhead | 5.70 | 6.90 | 9.40 | 6.40 | ||||
Fixed manufacturing overhead | 28.80 | 15.70 | 15.80 | 17.80 | ||||
Unit product cost | 70.30 | 65.70 | 55.70 | 51.40 | ||||
Additional data concerning these products are listed below.
Products | ||||||||
A | B | C | D | |||||
Grinding minutes per unit | 2.10 | 1.15 | 0.70 | 1.00 | ||||
Selling price per unit | $ | 85.20 | $ | 77.60 | $ | 74.40 | $ | 69.10 |
Variable selling cost per unit | $ | 2.65 | $ | 3.35 | $ | 4.10 | $ | 4.80 |
Monthly demand in units | 4,300 | 3,300 | 3,300 | 5,300 | ||||
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.)
Garrison 16e Rechecks 2017-09-13
Multiple Choice
Product A
Product B
Product D
Product C
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