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

The mixing machines are potentially the constraint in the production facility. A total of 8,540 minutes are available per month on these machines. Direct labor is a variable cost in this company.

How many minutes of mixing machine time would be required to satisfy demand for all three products?

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 the nearest dollar amount.)

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

Explanation / Answer

a. Demand on the mixing machine Products A B C Mixing minutes per unit 1.5 1.1 0.2 Monthly demand in units 2,300 4,300 2,300 total minutes required 3450 4730 460 8640 answer total time required for all products 8,640 answer b) optimal production plan A B C selling price per unit 73 95.4 88.9 direct materials 34.3 50.8 57.2 direct labor 21.7 24.3 15.1 variable MOH 1.5 0.9 0.8 variable selling cost per unit 2.1 2.6 2.4 total variable cost per unit 59.6 78.6 75.5 contribution margin per unit 13.4 16.8 13.4 mixing minutes per unit 1.5 1.1 0.2 CM per minute 8.93 15.27 67.00 ranks in terms of profitability 3 2 1 optimal production 2,233 4,300 2,300 answer time available for A = (8,540 - 460-4730)= 3350 1.5 minutes required for one unit so in 3350 mins it will produce 3350/1.5= 2233.333 units

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