Question
Holton Company makes three products in a single facility. Data concerning these products follow: Product A B C Selling price per unit $ 77.80 $
Holton Company makes three products in a single facility. Data concerning these products follow:
| Product | |||
|---|---|---|---|
| A | B | C | |
| Selling price per unit | $ 77.80 | $ 70.30 | $ 81.10 |
| Direct materials | $ 33.80 | $ 39.30 | $ 48.80 |
| Direct labor | $ 24.50 | $ 12.70 | $ 8.00 |
| Variable manufacturing overhead | $ 4.70 | $ 4.30 | $ 3.70 |
| Variable selling cost per unit | $ 2.00 | $ 3.10 | $ 2.20 |
| Mixing minutes per unit | 3.50 | 2.00 | 2.00 |
| Monthly demand in units | 3,000 | 1,000 | 2,000 |
The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Required:
- How many minutes of mixing machine time would be required to satisfy demand for all three products? CORRECT ANSWER is 16,500
- How much of each product should be produced to maximize net operating income? THE CORRECT ANSWER IS 2,286 UNITS OF A, 1,000 UNITS OF B, AND 2,000 UNITS OF 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? THIS IS THE QUESTION I NEED HELP WITH! REMEMBER TO ROUND INTERMEDIATE CALCULATIONS AND FINAL ANSWER TO 2 DECIMAL PLACES
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ISE Business Accounting
Authors: Frank Wood, Alan Sangster
8th Edition
9780273638407
