c5 Bacon Company makes four products in a single facility. These products have t
ID: 2597434 • Letter: C
Question
c5
Bacon Company makes four products in a single facility. These products have the following unit product costs:
Additional data concerning these products are listed below.
The grinding machines are the constraint in the production facility. A total of 53,600 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Which product makes the MOST profitable use of the grinding machines?
product a
product b
product c
product d
Products A B C D Direct materials $ 14.30 $ 10.20 $ 11.00 $ 10.60 Direct labor 19.40 27.40 33.60 40.40 Variable manufacturing overhead 4.30 2.70 2.60 3.20 Fixed manufacturing overhead 26.50 34.80 26.60 37.20 Unit product cost $ 64.50 $ 75.10 $ 73.80 $ 91.40Explanation / Answer
A B C D Selling price per unit 76.1 93.5 87.4 104.2 Variable costs: Direct materials 14.3 10.2 11 10.6 Direct labor 19.4 27.4 33.6 40.4 Variable manufacturing overhead 4.3 2.7 2.6 3.2 Variable selling cost per unit 2.2 1.2 3.3 1.6 Total Variable costs 40.2 41.5 50.5 55.8 Contribution margin 35.9 52 36.9 48.4 Grinding minutes per unit 3.8 5.3 4.3 3.4 Contribution margin per Grinding minute 9.45 9.81 8.58 14.24 Product D makes the MOST profitable use of the grinding machines
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