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Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
| | Products |
| | A | B | C | D |
| Direct materials | $ | 14.50 | $ | 10.40 | $ | 11.20 | $ | 10.80 |
| Direct labor | | 19.60 | | 27.60 | | 33.80 | | 40.60 |
| Variable manufacturing overhead | | 4.50 | | 2.90 | | 2.80 | | 3.40 |
| Fixed manufacturing overhead | | 26.70 | | 35.00 | | 26.80 | | 37.40 |
| Unit product cost | $ | 65.30 | $ | 75.90 | $ | 74.60 | $ | 92.20 |
| |
Additional data concerning these products are listed below.
| | Products |
| | A | B | C | D |
| Grinding minutes per unit | | 4.00 | | 5.50 | | 4.50 | | 3.60 |
| Selling price per unit | $ | 76.30 | $ | 93.70 | $ | 87.60 | $ | 104.40 |
| Variable selling cost per unit | $ | 2.40 | $ | 1.40 | $ | 3.50 | $ | 1.80 |
| Monthly demand in units | | 4,200 | | 4,200 | | 3,200 | | 2,200 |
| |
The grinding machines are potentially the constraint in the production facility. A total of 53,800 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
How many minutes of grinding machine time would be required to satisfy demand for all four products?
Multiple Choice
-
45,420
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53,800
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62,220
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14,500
Answer & Explanation
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