PRODUCT MIX DECISION ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products follow: 8. Product A P64.50 P20.90 P30.80 Product C P63.30 Product B Selling price per unit Direct materials Direct labor P64.80 P14.50 P33.40 P18.30 P26.00 P2.10 Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes are available per month on these machines. Direct labor is a variable cost in this company. REQUIREMENTS: (a) P1.60 P1.90 P1.00 3.50 4,000 P3.40 3.10 2,000 P1.50 3.50 4,000 How many minutes of mixing machine time would be required to satisfy demand for all products? (b) Which orders would you advise the company to accept first, second and third? (c) How many units of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.)
PRODUCT MIX DECISION ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products follow: 8. Product A P64.50 P20.90 P30.80 Product C P63.30 Product B Selling price per unit Direct materials Direct labor P64.80 P14.50 P33.40 P18.30 P26.00 P2.10 Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes are available per month on these machines. Direct labor is a variable cost in this company. REQUIREMENTS: (a) P1.60 P1.90 P1.00 3.50 4,000 P3.40 3.10 2,000 P1.50 3.50 4,000 How many minutes of mixing machine time would be required to satisfy demand for all products? (b) Which orders would you advise the company to accept first, second and third? (c) How many units of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:PRODUCT MIX DECISION
ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products
follow:
8.
Product A
P64.50
P20.90
P30.80
Product B
P64.80
Product C
Selling price per unit
Direct materials
P63.30
P14.50
P33.40
P1.90
P3.40
3.10
2,000
P18.30
Direct labor
Variable manufacturing overhead
Variable selling cost per unit
Mixing minutes per unit
Monthly demand in units
The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes
are available per month on these machines. Direct labor is a variable cost in this company.
REQUIREMENTS:
(a)
P26.00
P1.60
P2.10
P1.50
3.50
4,000
P1.00
3.50
4,000
How many minutes of mixing machine time would be required to satisfy demand for all products?
(b)
Which orders would you advise the company to accept first, second and third?
(c)
How many units of each product should be produced to maximize net operating income? (Round
off to the nearest whole unit.)
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education