Redhead Equipment Inc. manufactures three products. Information about the selling prices and unit costs for thethree products is below:ProductASelling price$90.00$60.00$110.00Variable costs$52.00$24.00$63.00Fixed costs$22.00$8.00$25.00Compression machine time11 min.6 min.13 min.Fixed costs are applied based on direct labour hours.Demand for the three products exceeds the company's current production capacity. The compression machine isthe constraint, with just 2,500 minutes of compression machine time available this week.Required:a. Given the compression machine constraint, which product should be emphasized? Be sure to show yourcalculations to support your recommendationActivaGo to P Demand for the three products exceeds the company's current production capacity. The compression machine isthe constraint, with just 2,500 minutes of compression machine time available this week.Required:a. Given the compression machine constraint, which product should be emphasized? Be sure to show yourcalculations to support your recommendation.b. If there is still unused demand for the product that the company is emphasizing from Part A above, up to howmuch would the company be willing to pay for an additional hour of compression machine timei-I米x2Fr vX2</>#3GIII

When the resources to produce the products are scare, the product giving maximum contribution per…

Answered: g price ple costs costc

Business

Accounting

g price ple costs costc

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Redhead Equipment Inc. manufactures three products. Information about the selling prices and unit costs for the
three products is below:
Product
A
Selling price
$90.00
$60.00
$110.00
Variable costs
$52.00
$24.00
$63.00
Fixed costs
$22.00
$8.00
$25.00
Compression machine time
11 min.
6 min.
13 min.
Fixed costs are applied based on direct labour hours.
Demand for the three products exceeds the company's current production capacity. The compression machine is
the constraint, with just 2,500 minutes of compression machine time available this week.
Required:
a. Given the compression machine constraint, which product should be emphasized? Be sure to show your
calculations to support your recommendation
Activa
Go to P

Demand for the three products exceeds the company's current production capacity. The compression machine is
the constraint, with just 2,500 minutes of compression machine time available this week.
Required:
a. Given the compression machine constraint, which product should be emphasized? Be sure to show your
calculations to support your recommendation.
b. If there is still unused demand for the product that the company is emphasizing from Part A above, up to how
much would the company be willing to pay for an additional hour of compression machine time
i-
I
米
x2
Fr v
X2
</>
#3
G
III

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