Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below.

	Alternative X			Alternative Y
Materials costs	$	54,000		$	78,800
Processing costs	$	58,200		$	58,200
Equipment rental	$	22,000		$	22,000
Occupancy costs	$	20,800		$	30,600

What is the financial advantage (disadvantage) of Alternative Y over Alternative X?

Multiple Choice

• $(34,600)

• $155,000

• $172,300

• $189,600

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

	Products
	A		B		C		D
Direct materials	$	16.20	$	20.10	$	13.10	$	15.80
Direct labor		18.20		21.60		16.00		10.00
Variable manufacturing overhead		5.00		6.20		8.70		5.70
Fixed manufacturing overhead		28.10		15.00		15.10		17.10
Unit product cost		67.50		62.90		52.90		48.60

Additional data concerning these products are listed below.

	Products
	A		B		C		D
Grinding minutes per unit		2.30		1.40		1.00		0.60
Selling price per unit	$	81.70	$	74.10	$	70.90	$	65.60
Variable selling cost per unit	$	3.20	$	3.70	$	3.40	$	4.10
Monthly demand in units	3,600		2,600		2,600		4,600

The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Which product makes the MOST profitable use of the grinding machines? (Round your intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-09-13

Multiple Choice

• Product B

• Product C

• Product D

• Product A