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. c e BONUS Homework Fle Edit View Favorites Tools Help ss BBCTC-Baruch CollegeCUNYFirst Login. CUNY Portal Log-in-Citizen CUNN B Barch nal Student Email OLab worl station Glocker Company makes three products in a single facility. These products have the following unit product costs: s 34.40 $ 50 90 $ 57.30 21.80 S 24.40 S 15.20 Direct materials Direct labor Variable manufacturing overhead $ 1.60 $ 1.00 S 0.90 Fixed manufacturing overhead 11.50 7.10 7.70 Unit product cost $69 30 $8340 $81.10 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 100 0.30 S 220 2.70 S 250 2,400 4,400 2,400 1.00 S 74.00 $ 9640 $ 899 The mixing machines are potentially the constraint in the production facility A total of 7,420 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 satisly demand for all three products? b. How much of each product should be produced to maxdimize net operating income? (Round your internnediate calculations to 2 decimal places and final answers to the nearest whole number.) Optimal productionExplanation / Answer
Answer:
A)
Calculaton of the minutes of mixing machine time would be required to satisfy demand for all three products
Product
A
B
C
Total
Monthly demand in units (x)
2400
4400
2400
Mixing minutes per unit (y)
1
1
0.3
Total Minuted Required(X*Y)
2400
4400
720
7520
So total minutes required to satisfy demand for all three products =7520 minutes
____________________________________________
(b)
Product
A
B
C
Total
Selling price per unit
74
96.4
89.9
Less:
Direct materials
34.4
50.9
57.3
Direct labor
21.8
24.4
15.2
Variable manufacturing overhead
1.6
1
0.9
Variable selling cost per unit
2.2
2.7
2.5
Total variable cost
60
79
75.9
Contribution margin per unit
14
17.4
14
Devided by Mixing minutes per unit
1
1
0.3
Contribution margin per unit
14
17.4
46.667
rank the product
III
II
I
Minutes available
2300
4400
720
7420
Units can be produced
2300
4400
2400
9100
To maximizing the net profit in the following way production should made
Product-A =2300 units
Product-B =4400 units
Product-C =2400 units
______________________________________________
(C)
.If the company is able to get additional hours of mixing, then it would produce product-A and which maximises the contribution per minute = $14
Product
A
B
C
Total
Monthly demand in units (x)
2400
4400
2400
Mixing minutes per unit (y)
1
1
0.3
Total Minuted Required(X*Y)
2400
4400
720
7520
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