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Kearney, Inc. makes kitchen tools Company management believes that a new model of coffee grinder would sell well at a price of $66 The company estimates unit materials costs to be $16 for the model


Kearney, Inc. makes kitchen tools. Company management believes that a new model of coffee grinder would sell well at a price of $66. The company estimates unit materials costs to be $16 for the model, and overhead costs would average $18 per unit. The local wage rate for direct labor is $28 per hour. Kearney has a goal of earning an operating profit of 20 percent of manufacturing costs for each of its products.

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What direct labor-hour input (hours per unit) could Kearney allow and still achieve its profit goal?

Apr 02 2020 View more View Less

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