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Glocker Company makes three products in a single facility. These products have the following unit product costs:
Product: A B C
Direct Materials $10.90 $15.80 $8.00
Direct Labour $12.50 $12.60 $9.90
Variable manufacturing overhead $2.40 $1.20 $1.40
Fixed manufacturing overhead $11.60 $7.20 $7.80
Unit product cost $37.40 $36.80 $27.10
Additional data concerning these products are listed below:
Product:
Mixing minutes per unit $2.00 $1.00 $0.50
Selling price per unit $55.80 $54.60 $43.10
Variable cost per unit $2.10 $1.40 $1.90
Monthly demand in units $2,000 1,000 3,000
The mixing machines are potentially a constraint in the production facility. A total of 5,900 minutes are available per month on these machines.
Required:
a) How many minutes of mixing machine time would be required to satisfy the demand for all four products?
b) How much of each product should be produced, rounded to the nearest whole unit, to maximize operating income
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