A company produces the following three products in a single manufacturing plant. Product One Two Three Selling price per unit Direct materials Direct labor $94.50 $79.60 $112.60 $41.20 $44.40 $ 67.70 $29.70 $14.20 $ 16.70 $ 5.70 $ 4.80 $ 7.80 $ 7.20 $ 3.40 $ 4.80 Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units 12.80 2.50 2.50 3,000 1,000 2,000 The mixing machines are potentially the constraint in the production facility. A total of 14,000 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. If the company has made the best use of the existing mixing machine capacity, what is the maximum amount they should be willing to pay for one additional hour of mixing machine time?

A company produces the following three products in a single manufacturing plant. Product One Two Three Selling price per unit Direct materials Direct labor $94.50 $79.60 $112.60 $41.20 $44.40 $ 67.70 $29.70 $14.20 $ 16.70 $ 5.70 $ 4.80 $ 7.80 $ 7.20 $ 3.40 $ 4.80 Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units 12.80 2.50 2.50 3,000 1,000 2,000 The mixing machines are potentially the constraint in the production facility. A total of 14,000 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. If the company has made the best use of the existing mixing machine capacity, what is the maximum amount they should be willing to pay for one additional hour of mixing machine time?

Name: A company produces the following three products in a single manufactu
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Description: A company produces the following three products in a single manufacturing plant.ProductOne$94.50 $79.60 $112.60$41.20 $44.40 $ 67.70TwoThreeSelling price per unitDirect materialsDirect labor$29.70 $14.20 $ 16.7e$ 5.70 $ 4.80 $$ 7.20 $ 3.40 $Variable

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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