Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Glover Company makes three products in a single facility. Demand for the company's products is increasing, and management requests assistance from you in determining
Glover Company makes three products in a single facility. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data regarding unit product costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Additional data concerning these products are listed below. Mixing minutes per unit Selling price per unit. Variable selling cost per unit Monthly demand in units A $ 35.00 Product B 22.40 2.20 12.10 7.70 $ 71.70 $ 85.80 $ 51.50 25.00 1.60 C $ 57.90 15.80 1.50 8.30 $ 83.50 A Product B C 1.40 $ 80.00 $ 2.80 0.90 $ 102.40 $ 3.30 0.50 $ 95.90 $ 3.10 3,000 4,300 2,300 The mixing machines are potentially the constraint in the production facility. A total of 9,120 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? 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 the best use of the existing mixing machine capacity? Complete this question by entering your answers in the tabs below. Required A Required B Required C Monthly demand in units 3,000 4,300 2,300 The mixing machines are potentially the constraint in the production facility. A total of 9,120 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? 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 the best use of the existing mixing machine capacity? Complete this question by entering your answers in the tabs below. Required A Required B Required C How much of each product should be produced to maximize net operating income? (Round final answers to the nearest whole unit.) A B Optimal production < Required A Required C > Mixing minutes per unit Selling price per unit Variable selling cost per unit Monthly demand in units A B 1.40 $ 80.00 $ 2.80 0.90 $ 102.40 $ 3.30 3,000 4,300 C 0.50 $ 95.90 $ 3.10 2,300 The mixing machines are potentially the constraint in the production facility. A total of 9,120 minutes are available per month 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? c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has best use of the existing mixing machine capacity? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required 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 the best use of the existing mixing machine capacity? (Round your intermediate calculations and final answer to 2 decimal places.) Maximum amount < Required B Required C >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started