Glover Company makes three products in a single facility. These products have the following unit product costs:

Product

A

B

C

Direct materials

$

35.10

$

51.60

$

58.00

Direct labor

22.50

25.10

15.90

Variable manufacturing overhead

2.30

1.70

1.60

Fixed manufacturing overhead

12.20

7.80

8.40

Unit product cost

$

72.10

$

86.20

$

83.90

Additional data concerning these products are listed below.

Product

A

B

C

Mixing minutes per unit

1.30

0.80

0.20

Selling price per unit

$

81.00

$

103.40

$

96.90

Variable selling cost per unit

$

2.90

$

3.40

$

3.20

Monthly demand in units

3100

4400

2400

The mixing machines are potentially the constraint in the production facility. A total of 7930 minutes are available per month on these machines. Direct labor is a variable cost in this company.

Required:

a. How much of each product should be produced to maximize net operating income? b. How many total minutes of mixing machine time be required to satisfy demand for all three products combined?

c.Place all three product in order of preference for production (Hint: Highest CM per minute product should be first and lowest CM per minute should be last)

- Product A

- Product B

- Product C

d. How much of each product should be produced to maximize net operating income? e. How many minutes of mixing machine time be required to satisfy demand for Product B only? f. Calculate Contribution Margin Per Minute for Product B only g. How many minutes of mixing machine time be required to satisfy demand for Product A only? h. Calculate Contribution Margin Per Unit for Product A only i. Calculate Contribution Margin Per Unit for Product B only j. Calculate Contribution Margin Per Minute for Product A only k - iii. Calculate Contribution Margin Per Unit for Product C only l - v. Calculate Contribution Margin Per Minute for Product C only m. 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?