If 60,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased?With all other things constant, if management is able to reduce the direct material for an electric mixer to $23 per unit, how many units of each product should be manufactured? Purchased? Kitchen Magician, Incorporated, has assembled the following data pertaining to its two most popular products.Direct materialDirect laborManufacturing overhead @ $48 per machine hourCost if purchased from an outside supplierAnnual demand (units)BlenderMixer$ 23$ 3917301148966511025,00038,000Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $35.Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers.Required:1. If 60,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each productshould the firm manufacture? How many units of each product should be purchased?2. With all other things constant, if management is able to reduce the direct material for an electric mixer to $23 per unit, how manyunits of each product should be manufactured? Purchased?

The process of deciding whether to produce a product or service in-house or to acquire it from an…

Kitchen Magician, Incorporated, has assembled the following data pertaining to its two most popular products. Direct material Direct labor Manufacturing overhead @ $48 per machine hour Cost if purchased from an outside supplier Annual demand (units) Blender $ 23 17 48 65 25,000 Mixer $39 30 96 110 38,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $35. Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 60,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? 2. With all other things constant, if management is able to reduce the direct material for an electric mixer to $23 per unit, how many units of each product should be manufactured? Purchased?

Kitchen Magician, Incorporated, has assembled the following data pertaining to its two most popular products. Direct material Direct labor Manufacturing overhead @ $48 per machine hour Cost if purchased from an outside supplier Annual demand (units) Blender $ 23 17 48 65 25,000 Mixer $39 30 96 110 38,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $35. Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 60,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? 2. With all other things constant, if management is able to reduce the direct material for an electric mixer to $23 per unit, how many units of each product should be manufactured? Purchased?

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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