Home / Questions / Brown Corporation makes four products in a single facility. These products have the following unit p
Brown Corporation makes four products in a single facility. These products have the following unit product costs:
| Products | ||||
| A | B | C | D | |
| Direct materials | $15.60 | $19.50 | $12.50 | $15.20 |
| Direct labor | 17.60 | 21.00 | 15.40 | 9.40 |
| Variable manufacturing overhead | 4.40 | 5.60 | 8.10 | 5.10 |
| Fixed manufacturing overhead | 27.50 | 14.40 | 14.50 | 16.50 |
| Unit product cost | $65.10 | $60.50 | $50.50 | $46.20 |
Additional data concerning these products are listed below.
| Products | ||||
| A | B | C | D | |
| Grinding minutes per unit | 2.00 | 1.10 | 0.70 | 0.30 |
| Selling price per unit | $78.70 | $71.10 | $67.90 | $62.60 |
| Variable selling cost per unit | $ 2.60 | $ 3.10 | $ 2.80 | $ 3.50 |
| Monthly demand in units | 3,000 | 2,000 | 2,000 | 4,000 |
The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Which product makes the LEAST profitable use of the grinding machines?
Product A
Product B
Product C
Product D
Apr 01 2020 View more View Less
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