Part 1:

Broze Company makes four products in a single facility. These products have the following unit product costs:

	Product
	A	B	C	D
Direct materials	$21.30	$17.20	$18.00	$17.60
Direct labor	26.40	34.40	40.60	47.40
Variable manufacturing overhead	11.30	9.70	9.60	10.20
Fixed manufacturing overhead	33.50	41.80	33.60	44.20
Unit produced cost	$92.50	$103.10	$101.80	$119.40

Additional data concerning these products are listed below.

	Product
	A	B	C	D
Grinding minutes per unit	4.50	6.00	5.00	4.10
Selling price per unit	$79.60	$97.00	$90.90	$107.70
Variable selling cost per unit	2.90	1.90	4.00	2.30
Monthly demand in units	4,700	4,700	3,700	2,700

The grinding machines are the constraint in the production facility. A total of 67,600 minutes are available per month on these machines. Direct labor is a variable cost in this company.

How many minutes of grinding machine time would be required to satisfy demand for all four products?

20,000.

67,600.

78,920.

57,770.

Part 2:

Roswell Inc has 6,600 machine hours available each month. The following information on the company's three products is available:

		Product 1		Product 2		Product 3
Contribution margin per unit	$	21.00	$	36.00	$	13.50
Machine hours per unit		3.00		2.00		1.00

If market demand exceeds the available capacity, in what sequence should orders be filled to maximize the company's profits?

Product 3 first, product 1 second, and product 2 third.

Product 1 first, product 2 second, and product 3 third.

Product 2 first, product 3 second, and product 1 third.

Product 3 first, product 2 second, and product 1 third.

Part 3:

The Speedy Delivery Service is considering the expansion of its business into afternoon retail delivery service. This would require an additional $31,000 in labor costs per month. Company-owned vehicles now used to make morning deliveries to local manufacturers could be used in the afternoons to make retail deliveries. However, it is estimated that an additional $16,000 would be required per month for gas, oil, and maintenance. It is further estimated that the retail delivery use of the trucks would be allocated 45% of the existing $19,000 fixed vehicle costs. What is the differential delivery cost per month for expanding into the retail delivery market?

$47,000.

$31,000.

$55,550.

$51,500.