Kitchen Magician, Inc., has assembled the following data pertaining to its two most popular products.

Problem $14-44$

Production Decisions; Limited

Capacity

Direct material

Direct labor

Manufacturing overhead $9$$$16$ per machine hour

Cost if purchased from an outside supplier

Annual demand $($units$)$

Past experience has shown that the fixed manufacturing overhead component included in the cost

per machine hour averages $$10.$ Kitchen Magician's management has a policy of filling all sales orders,

even if it means purchasing units from outside suppliers.

Required:

If $50,000$ 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?

With all other things constant, if management is able to reduce the direct material for an electric

mixer to $$6$ per unit, how many units of each product should be manufactured? Purchased?

Build a spreadsheet: Construct an Excel spreadsheet to solve requirement $1$ above. Show how the

solution will change if the following information changes: the unit cost if purchased from an out$-$

side supplier is $$22$ for the blender and $$40$ for the electric mixer.

$($CMA$,$ adapted$)$