Question
Glocker Company makes three products in a single facility. These products have the following unit product costs: Products A B C Direct materials $10.90 $15.80
Glocker Company makes three products in a single facility. These products have the following unit product costs:
| Products | ||
| A | B | C |
Direct materials | $10.90 | $15.80 | $8.00 |
Direct labour | 12.50 | 12.60 | 9.90 |
Variable manufacturing overhead | 2.40 | 1.20 | 1.40 |
Fixed manufacturing overhead | 11.60 | 7.20 | 7.80 |
Unit product cost | $37.40 | $36.80 | $27.10 |
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Additional data concerning these products are listed below.
| Products | ||
| A | B | C |
Mixing minutes per unit | 2.00 | 1.00 | 0.50 |
Selling price per unit | $55.80 | $54.60 | $43.10 |
Variable selling cost per unit | $2.10 | $1.40 | $1.90 |
Monthly demand in units | 2,000 | 1,000 | 3,000 |
The mixing machines are potentially a constraint in the production facility. A total of 5,900 minutes are available per month on these machines. Required: a) How many minutes of mixing machine time would be required to satisfy demand for all four products?( 3 Marks) b) How much of each product should be produced, rounded to the nearest whole unit, to maximize operating income(12 Marks)
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