Glunn Company makes three products in a single facility. These products have the

Question

Glunn Company makes three products in a single facility. These products have the following unit product costs:

    

    

Additional data concerning these products are listed below.

        

    

The mixing machines are potentially the constraint in the production facility. A total of 36,150 minutes are available per month on these machines. Direct labor is a variable cost in this company.

    

      

    

How much of each product should be produced to maximize net operating income? (Round your intermediate calculations to 2 decimal places and final answers to nearest whole unit.)

   

    

Up to how much should the company be willing to pay for one additional minute 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.)

  

Product A B C   Direct materials $ 22.30    $ 18.80    $ 14.20      Direct labor 23.60    24.40    19.50      Variable manufacturing overhead 10.70    10.40    10.00      Fixed manufacturing overhead 28.00    26.70    33.20      Unit product cost $ 84.60    $ 80.30    $ 76.90   

Explanation / Answer

Glunn Company makes three products in a single facility. These products have the

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