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 33.60 50.10 56.50 $ 21.00 23.60 $ 14.40 $ 2.00 1.40 0.10 overhead Fixed manufacturing overhead 12.70 8.30 8.90 Unit product cost $69.30 $83.40 $79.90 Additional data concerning these products are listed below Mixing minutes per unit Selling price per unit Variable selling cost per unit Monthly demand in units 0.40 0.30 66.00 88.40 81.90 1.90 $ 1.70 2,100 2.00 1.40 2,800 4,100 The mixing machines are potentially the constraint in the production facility. A total of 7,770 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

Explanation / Answer

a Answer:- Demand on the mixing machine:-

b Answer :- Calculation of optimal production plan:-

c Answer:- The company should be willing to pay up to the contribution margin per minute for the marginal job which is $4.00

Product A Product B Product C Mixing minutes per unit 2.00 0.40 0.30 Monthly demand in units 2800 4100 2100 Total minutes required 5600 1640 630 Total time required for all products = $7870

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