Slover Company makes three products in a single facility. Demand for the company's products is increasing, and management equests assistance from you in determining an economical sales and production mix for the coming year. The company has provided he following data regarding unit product costs: Product A B Direct materials $ 35.00 $ 51.50 $ 57.90 Direct labor 22.40 25.00 15.80 Variable manufacturing overhead Fixed manufacturing overhead 2.20 12.10 1.60 1.50 7.70 8.30 Unit product cost $ 71.70 $ 85.80 $ 83.50 \dditional data concerning these products are listed below. Product A B Mixing minutes per unit 1.40 0.90 0.50
Slover Company makes three products in a single facility. Demand for the company's products is increasing, and management equests assistance from you in determining an economical sales and production mix for the coming year. The company has provided he following data regarding unit product costs: Product A B Direct materials $ 35.00 $ 51.50 $ 57.90 Direct labor 22.40 25.00 15.80 Variable manufacturing overhead Fixed manufacturing overhead 2.20 12.10 1.60 1.50 7.70 8.30 Unit product cost $ 71.70 $ 85.80 $ 83.50 \dditional data concerning these products are listed below. Product A B Mixing minutes per unit 1.40 0.90 0.50
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Plz answer A,B&C
Transcribed Image Text:Glover Company makes three products in a single facility. Demand for the company's products is increasing, and management
requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided
the following data regarding unit product costs:
Product
A
B
Direct materials
$ 35.00
$ 51.50
$ 57.90
Direct labor
22.40
25.00
15.80
Variable manufacturing overhead
2.20
1.60
1.50
7.70
$ 85.80
Fixed manufacturing overhead
12.10
8.30
Unit product cost
$ 71.70
$ 83.50
Additional data concerning these products are listed below.
Product
A
B
Mixing minutes per unit
Selling price per unit
Variable selling cost per unit
Monthly demand in units
1.40
$ 80.00
$ 2.80
3,000
0.90
$ 102.40
$ 3.30
4,300
0.50
$ 95.90
$ 3.10
2,300
The mixing machines are potentially the constraint in the production facility. A total of 9,120 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?
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