ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Fixed overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product B A $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 $2.10 $10.80 $11.90 The following additional data for these products are available: Product A Product B $59.30 $51.70 1.20 mins 0.70 mins $3.60 Product с $20.80 4,000 $10.50 $1.50 2,000 $2.00 $8.80 Product C 0.60 mins $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?
ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Fixed overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product B A $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 $2.10 $10.80 $11.90 The following additional data for these products are available: Product A Product B $59.30 $51.70 1.20 mins 0.70 mins $3.60 Product с $20.80 4,000 $10.50 $1.50 2,000 $2.00 $8.80 Product C 0.60 mins $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:ABC Corporation makes three products in a single facility. These products have the following
unit product costs:
Direct
materials
Direct
labor
Variable
overhead
Machine time
per unit (in
minutes)
Selling price per
unit
Sales
commission per
Product Product
A
B
$19.90 $15.20
unit
Monthly
demand in units
$12.20 $8.70
$1.60
Fixed
overhead
The following additional data for these products are available:
$2.10
$59.30
$10.80 $11.90 $8.80
$3.60
Product A Product B Product C
4,000
Product
с
$20.80
1.20 mins 0.70 mins 0.60 mins
$10.50
$51.70
$2.00
$1.50
2,000
$59.50
$2.20
4,000
Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes
of machine time is available per month, then which product makes the most profitable use of
the company's machines?
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