Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Kitchen Magician, Inc. has assembled the following data pertaining to its two most popular products. Electric Mixer Blender $ 25 43 19 Direct material Direct
Kitchen Magician, Inc. has assembled the following data pertaining to its two most popular products. Electric Mixer Blender $ 25 43 19 Direct material Direct labor Manufacturing overhead @ $52 per machine hour Cost if purchased from an outside supplier Annual demand (units) 52 32 104 115 32,000 67 27,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $40. Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 53,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? 2. With all other things constant, if management is able to reduce the direct material for an electric mixer to $25 per unit, how many units of each product should be manufactured? Purchased? Complete this question by entering your answers in the tabs below. Required 1 Required 2. If 53,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? Blender Manufacture Purchase Electric Mixer 13,000 19,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 - --- With all other things constant, if management is able to reduce the direct material for an electric mixer to $25 per unit, how many units of each product should be manufactured? Purchased? Blender Electric Mixer Manufacture Purchase
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