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Glover Company makes three products in a single facility. These products have the following unit product costs: Additional data concerning these products are listed below.
Glover Company makes three products in a single facility. These products have the following unit product costs: Additional data concerning these products are listed below. The mixing machines are potentially the constraint in the production facility. A total of 7,990 minutes are available per month on these machines. Direct labor is a variable cost in this company. Required: a. Based on the existing production constraints, how much of each product should be produced to maximize net operating income? Explain your answer and show your computations. b. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has already made the best use of the existing mixing machine capacity? Explain your answer and show your computations. a. Optimal production plan
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