Glocker Company makes three products in a single facility. These products have t

Question

Glocker Company makes three products in a single facility. These products have the following unit product costs: Product Direct materials Direct labor Variable manufacturing S34.80 $51.30 $57.70 22.20 24.80 15.60 2.00 1.40 1.30 Fixed manufacturing 11.90 7.50 8.10 Unit product cost 570.90 $85.00 $82.70 Additional data concening these products are listed below. Product Mixing minutes per unit Selling price per unit Variable selling cost per 2.60 S3.10 S2.90 120 1.00 0.30 $78.00 $100.40 $93.90 unit Monthly demand in units 2,800 4,100 2,100 The mixing machines are potentially the constraint in the production facility. A total of 7,990 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 many units of each product should be produced to maximize net operating income? (Round intermediate calculations to two decimal places. Round off 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 your answer to 2 decimal places.)

Explanation / Answer

a. Demand on the mixing machine Products A B C Mixing minutes per unit 1.2 1 0.3 Monthly demand in units 2,800 4,100 2,100 total minutes required 3360 4100 630 8090 answer total time required for all products 8,090 answer b) optimal production plan A B C selling price per unit 78 100.4 93.9 direct materials 34.8 51.3 57.7 direct labor 22.2 24.8 15.6 variable MOH 2 1.4 1.3 variable selling cost per unit 2.6 3.1 2.9 total variable cost per unit 61.6 80.6 77.5 contribution margin per unit 16.4 19.8 16.4 mixing minutes per unit 1.2 1 0.3 CM per minute 13.67 19.80 54.67 ranks in terms of profitability 3 2 1 optimal production 2,717 4,100 2,100 answer time available for A = (7990-630-4100)= 3260 1.2 minutes required for one unit so in 3260 mins it will produce 3260/1.2= 2716.667 units c) Maximum amount it will be willing to pa will be 13.67

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.