Reference no: EM132738976

Geary Manufacturing has assembled the following data pertaining to two popular products.

                                       Blender                         Electric mixer

Direct materials                P 6                  P 11

Direct labor                           4                      9

Factory overhead @ P16 per hour 16              32

Cost if purchased from an

outside supplier                        20                  38

Annual demand (units)               20,000           28,000

Plroblem 1: Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages P10. Geary has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. If 50,000 machine hours are available, and Geary Manufacturing desires to follow an optimal strategy, it should

A. produce 25,000 electric mixers, and purchase all other units as needed

B. produce 20,000 blenders and 15,000 electric mixers, and purchase all other units as needed

C. produce 20,000 blenders and purchase all other units as needed

D. purchase all units as needed