Question: I figured out how to do A but I'm not sure how to figure out B. ROBLEM 7 UTILIZATION OF A SCARCE RESOURCE: Glunn Company
ROBLEM 7 UTILIZATION OF A SCARCE RESOURCE: Glunn Company makes three products in a single acility. These products have the following unit product costs: Product $12.80 S9.30 $4.70 Direct materials 14.10 14.90 10.00 Direct labor 1.20 0.90 0.50 Variable manufacturing overhead.... Fixed manufacturing overhead. 18.50 17.20 23.70 Unit product cost Additional data concerning these products are listed below. Product 3.70 3.40 3.90 Mixing minutes per unit $59.20 $60.10 $55.30 Selling price per unit Variable selling cost per unit $2.90 $2.70 S3.70 2.000 4.000 2.000 Monthly demand in units The mixing machines are potentially the constraint in the production facility. A total of 24,200 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 all three for products? be produced to maximize net operating income? (Round off to the b. How much of each product should nearest whole unit.) company be willing to pay for one additional hour of mixing machine time c. Up to how much should the machine capacity? (Round off to the if the company has made the best use of the existing mixing nearest 370 v 2 ooo 7400 A. whole cent.) 3.40 x Req min 128 10
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