Holton Company makes three products in a single facility. Data concerning these products follow:

Selling price per unit

Direct materials

Direct labOr

Variable manufacturing overhead variable seing cost per unit

Mixing

manuces por unic

Monthly demand in units

PrOdUCE

$91.00 $72.00 $84.70

$39.60 $40.10 $50.90

$28.60 $12.90

S0.30

$ 5.50

$ 4.40 $ 4.80

$ 4.60

5 2.90

8.20

2.00

2.00

3.000

1,000

2,000

The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Required:

1. How many minutes of mixing machine time would be required to satisfy demand for all three products?
2. How much of each product should be produced to maximize net operating income?
3. 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?

Holton Company makes three products in a single facility. Data concerning these products follow: The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines. Direct labor is a variable cost in this company. 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? 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