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

Product
ABC
Direct materials$ 32.80$ 49.30$ 55.70
Direct labor20.2022.8013.60
Variable manufacturing overhead1.200.600.90
Fixed manufacturing overhead13.509.10 9.70
Unit product cost$ 67.70$ 81.80$ 79.90

Additional data concerning these products are listed below.

Product
ABC
Mixing minutes per unit1.201.200.20
Selling price per unit$ 58.00$ 80.40$ 73.90
Variable selling cost per unit$ 0.60$ 1.10$ 2.30
Monthly demand in units2,0003,3001,300

The mixing machines are potentially the constraint in the production facility. A total of 6,520 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?

b. How much of each product should be produced to maximize net operating income? (Round final answers to the nearest whole unit.)

c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? (Round your intermediate calculations and final answer to 2 decimal places.)

Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
Authors:
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hfrankoshfrankos
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