Glover Company makes three products in a single facility. These products have the following unit product costs: Products Y Z Direct materials RM15.80 RM11.00 RM14.10 Direct labour 19.10 17.20 20.30 Variable manufacturing overhead 2.60 3.10 3.30 Fixed manufacturing overhead 21.60 24.10 31.30 Unit product cost RM59.10 RM55.40 RM69.00 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 3.30 mins RM74.30 RM2.80 2,000 units Products Y 2.60 mins RM66.40 RM2.30 1,000 units Z 3.10 mins RM81.00 RM1.90 1,000 units The mixing machines are potentially the constraint in the production facility. A total of 10,900 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? b. How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit). 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 off to the nearest whole cent). d. Discuss the differences between relevant from irrelevant information? Provide ONE example for each. Glover Company makes three products in a single facility. These products have the following unit product costs: Products Y Z Direct materials RM15.80 RM11.00 RM14.10 Direct labour 19.10 17.20 20.30 Variable manufacturing overhead 2.60 3.10 3.30 Fixed manufacturing overhead 21.60 24.10 31.30 Unit product cost RM59.10 RM55.40 RM69.00 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 3.30 mins RM74.30 RM2.80 2,000 units Products Y 2.60 mins RM66.40 RM2.30 1,000 units Z 3.10 mins RM81.00 RM1.90 1,000 units The mixing machines are potentially the constraint in the production facility. A total of 10,900 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? b. How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit). 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 off to the nearest whole cent). d. Discuss the differences between relevant from irrelevant information? Provide ONE example for each
