Glover Company makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 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 A $ 34.70 Product B 22.10 1.90 11.80 $ 51.20 24.70 1.30 C $ 57.60 15.50 1.20 7.40 8.00 $ 70.50 $ 84.60 $ 82.30 A 1.10 Product B 0.90 $ 77.00 $ 99.40 C 0.20 $ 92.90 $ 2.50 $ 3.00 $ 2.80 2,700 4,000 2,000 The mixing machines are potentially the constraint in the production facility. A total of 6,870 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? 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? Complete this question by entering your answers in the tabs below. Required A Required B Required C How many minutes of mixing machine time would be required to satisfy demand for all three products? Total minutes required
Glover Company makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 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 A $ 34.70 Product B 22.10 1.90 11.80 $ 51.20 24.70 1.30 C $ 57.60 15.50 1.20 7.40 8.00 $ 70.50 $ 84.60 $ 82.30 A 1.10 Product B 0.90 $ 77.00 $ 99.40 C 0.20 $ 92.90 $ 2.50 $ 3.00 $ 2.80 2,700 4,000 2,000 The mixing machines are potentially the constraint in the production facility. A total of 6,870 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? 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? Complete this question by entering your answers in the tabs below. Required A Required B Required C How many minutes of mixing machine time would be required to satisfy demand for all three products? Total minutes required
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Glover Company makes three products in a single facility. These products have the following unit product costs:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Unit product cost
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
A
$ 34.70
Product
B
22.10
1.90
11.80
$ 51.20
24.70
1.30
C
$ 57.60
15.50
1.20
7.40
8.00
$ 70.50
$ 84.60
$ 82.30
A
1.10
Product
B
0.90
$ 77.00
$ 99.40
C
0.20
$ 92.90
$ 2.50
$ 3.00
$ 2.80
2,700
4,000
2,000
The mixing machines are potentially the constraint in the production facility. A total of 6,870 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?
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?
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
How many minutes of mixing machine time would be required to satisfy demand for all three products?
Total minutes required
<Required A
Required B >
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