Question
Glocker Company makes three products in a single facility. These products have the following unit product costs: Product A B C Direct materials $ 34.30
Glocker Company makes three products in a single facility. These products have the following unit product costs: |
Product | |||||||||
A | B | C | |||||||
Direct materials | $ | 34.30 | $ | 50.80 | $ | 57.20 | |||
Direct labor | $ | 21.70 | $ | 24.30 | $ | 15.10 | |||
Variable manufacturing overhead | $ | 1.50 | $ | 0.90 | $ | 0.80 | |||
Fixed manufacturing overhead | 11.40 | 7.00 | 7.60 | ||||||
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Unit product cost | $68.90 | $83.00 | $80.70 | ||||||
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Additional data concerning these products are listed below. | |||||||||
Mixing minutes per unit | 1.50 | 1.10 | 0.20 | ||||||
Selling price per unit | $ | 73.00 | $ | 95.40 | $ | 88.90 | |||
Variable selling cost per unit | $ | 2.10 | $ | 2.60 | $ | 2.40 | |||
Monthly demand in units | 2,300 | 4,300 | 2,300 | ||||||
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The mixing machines are potentially the constraint in the production facility. A total of 8,540 minutes are available per month on these machines. Direct labor is a variable cost in this company. |
Required: | |
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 produced to maximize net operating income? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
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