Question
Kaz Company makes two products in a single facility. These products have the following unit product costs. A B Variable manufacturing costs $28.50 $ 24.80
Kaz Company makes two products in a single facility. These products have the following unit product costs.
A B
Variable manufacturing costs $28.50 $ 24.80
Fixed manufacturing overhead $18.50 $17.20
unit product costs $47.00 $42.00
Additional data:
A B
Mixing minutes per unit 5 4
Selling price per unit $68.90 $65.50
Variable selling cost unit $2.90 $2.70
Monthly demand in units 2000 4000
The mixing machines are potentially the constraint in the production facility. A total of 18000 minutes are available per month on these machines. Up to how much should the capacity be willing to pay for sixty minutes of additional mixing machine time if the company has made the best use of the exisiting mix capacity?
A. $570
B. $611
C. $450
D. $485
Please show all work.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started