Problem 14-46 Production Decisions; Limited Capacity (LO 14-5,14-6) Chef Gourmet, Inc., has assembled the following data pertaining to its two most popular products Food Blender Processor $27 $47 34 Direct material Direct labor Manufacturing overhead 21 56 71 $56 per machine 112 hour Cost if purchased from an outside supplier Annual demand (units) 29,000 36,00O Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $44. Management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 62,000 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? Food Processor Blender Manufacture Purchase 2. With all other things constant, if management is able to reduce the direct material for a food processor to $27 per unit, how many units of each product should be manufactured? Purchased? Food Blender Processor Manufacture Purchase