4. Utilizing Limited Constraint Decision Holt Company makes three products in a single facility. Data concerning these products follow: Selling price per unit. Direct materials. Direct labor.... Variable manufacturing overhead. Variable selling cost per unit. Mixing minutes per unit. Monthly demand in units. Products B A C $67.90 $57.70 $43.90 $12.10 $10.30 $8.60 $14.10 $8.00 $6.80 $2.60 $2.50 2.70 1.000 $2.20 $2.20 3.30 3,000 3.000 $1.80 $2.50 4.70 The mixing machines are potentially the constraint in the production facility. A total of 25,800 minutes are available per month on these machines. Direct labor is a variable cost in this company.

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4. Utilizing Limited Constraint Decision
Holt Company makes three products in a single facility. Data concerning these products follow:
Selling price per unit
Direct materials.
Direct labor.....
Variable manufacturing overhead..
Variable selling cost per unit.
Mixing minutes per unit
Monthly demand in units.
Products
B
A
C
$67.90
$57.70 $43.90
$12.10 $10.30 $8.60
$14.10
$8.00
$6.80
$2.60
$2.20
$1.80
$2.50
$2.20
$2.50
2.70
3.30
4.70
1,000
3.000 3.000
The mixing machines are potentially the constraint in the production facility. A total of 25,800
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 many of each product should be produced to maximize net operating income? (Round off
to the nearest whole unit.)
Transcribed Image Text:4. Utilizing Limited Constraint Decision Holt Company makes three products in a single facility. Data concerning these products follow: Selling price per unit Direct materials. Direct labor..... Variable manufacturing overhead.. Variable selling cost per unit. Mixing minutes per unit Monthly demand in units. Products B A C $67.90 $57.70 $43.90 $12.10 $10.30 $8.60 $14.10 $8.00 $6.80 $2.60 $2.20 $1.80 $2.50 $2.20 $2.50 2.70 3.30 4.70 1,000 3.000 3.000 The mixing machines are potentially the constraint in the production facility. A total of 25,800 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 many of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.)
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