Situation Three Rutro Corp. makes three products in a single facility. These products have the following unit product costs: - Is there anything misleading about the figure given for fixed manufacturing overhead? - What is the significance of contribution margins with respect to determining how much of each product to produce to maximize profit? - What is the significance of contribution margins with respect to determining how much Rutro should pay for additional machine time? - Why isn't sales price or the difference between sales prices and the unit costs stated in the problem the best predictor of the priority in producing the products? - How many minutes of mixing machine time would be required to satisfy demand for all three products? - What is the contribution margin per minute individually for Products A, B, and C? - Using only the available 40,000 minutes of machine time, how much of each product should be produced to maximize net operating income? (Round down to the nearest whole units.) - Is there unmet demand for product(s)? If so, how much and for which product(s)? - Assume there is unmet product demand. How much in total should Rutro be willing to pay for additional machine time? - Did variable selling cost per unit figure into any of your calculations? Which ones, if any? Additional data concerning these products are listed below: The mixing machines are potentially the constraint in the production facility. A total of 40,000 minutes are available per month on these machines. Direct labor is a variable cost in this company