Question: I need help on what formulas it took to get to the answers .this problem has answers but I need the work and formulas because
I need help on what formulas it took to get to the answers .this problem has answers but I need the work and formulas because I don't understand how to get the answers.
Example of Problem on Constrained Resource Holton Company makes three products in a single facility. Data concerning these products follow: Product B Selling price per unit $ 150.80 $76.70 $ 169.30 Direct materials $ 65.60 $ 42.70 $ 101.80 Direct labor $ 47.20 $ 13.60 $ 30.10 Variable manufacturing overhead $ 9.00 $ 4.50 $ 14.00 Variable selling cost per unit $ 24.00 $ 3.30 $ 8.60 Mixing minutes per unit 42.60 2.50 2.50 Monthly demand in units 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: a. How many minutes of mixing machine time would be required to satisfy demand for all three products? Total minutes required 135,300 b. How much of each product should be produced to maximize net operating income? Product A Product B Product C Optimal production 1,000 2,000 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? Mixing machine capacity S 7.20 153
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