ABC Co . makes three products in a single facility. These products have the following unit product
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Question:
ABC Co makes three products in a single facility. These products have the following unit product costs:
Products
A B C
Direct materials $ $ $
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
Unit product cost $ $ $
Additional data concerning these products are listed below:
Products
A B C
Mixing minutes per unit
Selling price per unit $ $ $
Variable selling cost per unit $ $ $
Monthly demand in units
The mixing machines are potentially the constraint in the production facility. A total of minutes are available per month on these machines.
Required:
a How many minutes of mixing machine time would be required to satisfy demand for all three products?
b How much of each product should be produced to maximize net operating income? Round to the nearest whole unit.
c Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? Round off to the nearest whole cent.
Related Book For
Applied Calculus
ISBN: 9781119275565
6th Edition
Authors: Deborah Hughes Hallett, Patti Frazer Lock, Andrew M. Gleason, Daniel E. Flath, Sheldon P. Gordon, David O. Lomen, David Lovelock, William G. McCallum,
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