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Glocker Company makes three products in a single facility. These products have the following unit product costs: Product A B C Direct Materials $ 12.50
Glocker Company makes three products in a single facility. These products have the following unit product costs:
Product | |||
A | B | C | |
Direct Materials | $ 12.50 | $ 14.40 | $ 15.25 |
Direct Labor | 15.50 | 12.60 | 9.75 |
Variable Manufacturing Overhead | 2.75 | 2.20 | 2.95 |
Fixed Manufacturing Overhead | 12.85 | 7.50 | 6.75 |
Unit product cost | $ 43.60 | $ 36.70 | $ 34.70 |
Additional information about the products: | |||
Product | |||
A | B | C | |
Mixing minutes per unit | 1.50 | 0.50 | 1.00 |
Selling price per unit | 47.20 | 75.00 | 50.20 |
Variable selling cost per unit | 2.25 | 1.50 | 1.75 |
Monthly demand in units | 3,000 | 1,500 | 2,700 |
The mixing machines are potentially the constraint in the production facility. | |||
A total of 6,250 minutes are available per month on these machines. |
a. How many minutes of mixing machine time would be required to satisfy demand for all three products? | |||||
b. How much of each product should be producted to maximize net operating income? (Round to whole units) | |||||
c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the | |||||
company has made th best use of the existing mising machine capacity? (Round to whole cents) |
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