c5

Bacon Company makes four products in a single facility. These products have the following unit product costs:

	Products
	A				B				C				D
Direct materials	$	14.30			$	10.20			$	11.00			$	10.60
Direct labor		19.40				27.40				33.60				40.40
Variable manufacturing overhead		4.30				2.70				2.60				3.20
Fixed manufacturing overhead		26.50				34.80				26.60				37.20
Unit product cost	$	64.50			$	75.10			$	73.80			$	91.40

Additional data concerning these products are listed below.

	Products
	A				B				C				D
Grinding minutes per unit		3.80				5.30				4.30				3.40
Selling price per unit	$	76.10			$	93.50			$	87.40			$	104.20
Variable selling cost per unit	$	2.20			$	1.20			$	3.30			$	1.60
Monthly demand in units		4,000				4,000				3,000				2,000

The grinding machines are the constraint in the production facility. A total of 53,600 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?

product a

product b

product c

product d