Business, 05.05.2020 09:07 kashusledbetter
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Products
A B C D
Direct materials $16.60 $20.50 $13.50 $16.20
Direct labor 18.60 22.00 16.40 10.40
Variable manufacturing overhead 5.40 6.60 9.10 6.10
Fixed manufacturing overhead 28.50 15.40 15.50 17.50
Unit product cost 69.10 64.50 54.50 50.20
Additional data concerning these products are listed below.
Products
A B C D
Grinding minutes per unit 2.50 1.60 1.20 0.80
Selling price per unit $83.70 $76.10 $72.90 $67.60
Variable selling cost per unit $3.60 $4.10 $3.80 $4.50
Monthly demand in units 4,000 3,000 3,000 5,000
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 MOST profitable use of the grinding machines?
Answers: 3
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