Question
Kearney, Inc., makes kitchen tools. Company management believes that a new model of coffee grinder would sell well at a price of $92.40. The company
Kearney, Inc., makes kitchen tools. Company management believes that a new model of coffee grinder would sell well at a price of $92.40. The company estimates unit materials costs to be $6.00 for the model, and overhead costs would average $42.40 per unit. The local wage rate for direct labor is $22.00 per hour. Kearney has a goal of earning an operating profit of 40.00 percent of manufacturing costs for each of its products.
Required: What direct labor-hour input (hours per unit) could Kearney allow and still achieve its profit goal? (Round your answer to 2 decimal places.)
Maximum direct labor time per unithours is:
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