25. Brown Corporation makes four products in a single fochity. These products ha

Question

25. Brown Corporation makes four products in a single fochity. These products have the following unit product 4.20 40.30 3.10 4 20 26.40 2.60 9100 Additional data concerning these products are isted below $76.00 $93.40 The grinding machines are poterbialy the constraint in the production facity A total of 56,500 mmutes are avalable per month on these machines Direct lsbor is a vanable cost in this company up to how much should the company be wating to pay for one adomonal minute of grinding mechine timeir the company has made the best use of the existing gnnding machine calculetions and final answer to 2 decimal places) cepacity? Pound your intenmediate o $1195 O $1476 O $443 O $88 OType here to search

Explanation / Answer

A B C D Direct material 14.2 10.1 10.9 10.5 Direct labor 19.3 27.3 33.5 40.3 Variable manufacturing overheads 4.2 2.6 2.5 3.1 Variable selling expense 2.1 1.1 3.2 1.5 Total variable expense 39.8 41.1 50.1 55.4 Selling price 76 93.4 87.3 104.1 Variable expense 39.8 41.1 50.1 55.4 Contribution margin 36.2 52.3 37.2 48.7 Grinding minutes per unit 3.7 5.2 4.2 3.3 Contribution per grinding minute 9.78 10.06 8.86 14.76 Rank 3 2 4 1 Units 3900 3900 2752 3100 Grinding minutes per unit 3.7 5.2 4.2 3.3 Total grinding minutes allocated 14430 20280 11560 10230 Number of units are short for product C so contribution margin per grinding minute for C will be the Additional cost to be paid So correct answer is D 8.86

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