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Thank you in advance :) Hutchison Inc. makes three products. Information related to these products are as follows: lu Products Y Z Selling price per
Thank you in advance :)
Hutchison Inc. makes three products. Information related to these products are as follows: lu Products Y Z Selling price per unit $ 67.90 $ 57.70 $ 43.90 Direct materials per unit $ 12.10 $ 10.30 $ 8.60 Direct labour per unit $ 14.10 $ 8.00 $ 6.80 Variable manufacturing overheard $ 2.60 $ 2.20 $ 1.80 Variable selling cost per unit $ 2.50 $ 2.20 $ 2.50 Mixing minutes per unit 2.7 3.3 4.7 Monthly demand in units 1,000 3,000 3,000 The mixing machines are potentially the constraint in the production facility. A total of 25,800 minutes are available per month on these machines. Direct materials and direct labour are variable costs. Required: a. How many minutes of mixing machine time is required to meet demand for all three products? (2 marks) b. How much of each product should be produced to maximize operating profits? (6 marks) c. Up to how much should Hutchison be willing to pay for one additional hour of mixing machine time if they made the best use of the existing mixing machine capacity? (2 marks)Step by Step Solution
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