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Blocker Company makes three products in a single facility These products have the following unit product costs and additional costs Product 1 Direct Material $3380 Direct Labor 2120 Variable

 

Blocker Company makes three products in a single facility These products have the following unit product costs and additional costs:

 

Product 1

Direct Material $3380

Direct Labor 2120

Variable Manufacturing Overhead 220

Fixed Manufacturing Overhead 1250

Unit Product Cost $6970

Mixing minutes per unit $120

Selling Price per Unit 6800

Variable Selling Cost per unit 160

Monthly demand in units 3,000

 

 

Product 2

Direct Material $5030

Direct Labor 2380

Variable Manufacturing Overhead 160

Fixed Manufacturing Overhead 810

Unit Product Cost $8380

Mixing minutes per unit $060

Selling Price per Unit 9040

Variable Selling Cost per unit 210

Monthly demand in units 4300

 

 

Product 3

Direct Material $5670

Direct Labor 1460

Variable Manufacturing Overhead 030

Fixed Manufacturing Overhead 870

Unit Product Cost $8030

Mixing minutes per unit $010

Selling Price per Unit 8390

Variable Selling Cost per unit 190

Monthly demand in units 2,300

 

The mixing machines are potentially the constraint in the production facility A total of 6,310 minutes are available per month on these machines Direct labor is a variable cost

 

1How many minutes of mixing machine time would be required to satisfy demand for all 3 products?

2How much of each product should be produced to maximize net operating income?

3Up 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?

 

 

 

 

 

 

 

 

 

 

 

Apr 29 2020 View more View Less

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