The framing machines are potentially the constraint in the factory production facility. A total of 35,800 minutes is available per month on these machines. Direct labour is a variable cost in this company.

Required:

a. How many minutes of framing machine time would be required to satisfy demand for all three products?

b. How much of each type of frame should be produced to maximize net operating income? (Round off to the nearest whole dollar.)

c. How high should the company be willing to pay for one additional hour of framing machine time if the company has made the best use of the existing framing machine capacity? (Round off to the nearest whole cent.)

Question #1 Frames R' Us Company makes three different types of frames in a single factory facility. Information and figures concerning these products is as follow: Products A B $87.50 $17.30 $33.70 Selling price per unit Direct materials $11.00 $10.30 $12.60 Direct labour $15.10 $9.00 $9.80 $2.60 $3.20 $3.80 Variable manufacturing overhead $2.50 $2.20 $2.50 Variable selling cost per unit 2.70 3.30 4.70 Mixing minutes per unit Monthly demand in units 1,000 3,000 3,000