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Edge Bakery supplies high-volume grocery chains with baked goods. It has three types of pie (Apple, Blueberry, and Strawberry) that need to share a mixing
Edge Bakery supplies high-volume grocery chains with baked goods. It has three types of pie (Apple, Blueberry, and Strawberry) that need to share a mixing machine. See exhibit below for data concerning these products and demand on the mixing machine total time required for all products is 26,700 minutes. The company is concerned about possible capacity issues, as only 20,000 mixing machine minutes are available. Given this limitation it would like to maximize operating income (Hint: how to allocate products to maximize operating income based no capacity) Selling price per unit Direct Materials Direct Labor Variable manufacturing overhead Variable selling cost per unit Minutes per unit Monthly demand in units Apple Pie $67.90 $12.10 $14.10 $2.60 $2.50 2.7 1,000 Products Blueberry Pie Strawberry Pie $57.70 $43.90 $10.30 $8.60 $8.00 $8.60 $2.20 $1.80 $2.20 $2.50 3.3 4.7 3,000 3,000 Demand on Mixing Machine Minutes per unit Monthly demand in units Total minutes required Apple Pie 2.7 1.000 2.700 Products Blueberry Pie 3.3 3.000 9.900 Strawberry Pie 4.7 3.000 14,100
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