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Holt Company makes three products in a single facility. Data concerning these products follow: Products B C $58 $68 $44 $20 $29 $17 Selling price
Holt Company makes three products in a single facility. Data concerning these products follow: Products B C $58 $68 $44 $20 $29 $17 Selling price per unit Variable production cost per unit Variable selling cost per unit Mixing minutes per unit Monthly demand in units $2 $3 $2 4 2 5 3,000 1,000 3,000 The mixing machines are potentially the constraint in the production facility. A total of 27,000 minutes are available per month on these machines. Direct labor is a variable cost in this company. Required: a) Which orders would you advise the company to accept first? Second? Third? Show work to support your decision. (5 marks) b) How much would the company be willing to pay for one additional minute of mixing machine time in excess of the normal price if the company has made the best use of the existing mixing machine capacity? (1 marks)
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