How many minutes of mixing machine time would be

Assignment Help Managerial Accounting

Reference no: EM133502582

Case: Guerrero Company makes three products in a single facility. These products have the following unit product costs:

	Products
	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.

	Products
	A	B	C
Mixing minutes per unit	2.00	1.00	0.50
Selling price per unit	$55.80	$54.60	$43.10
Variable selling 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 is available per month on these machines.

Direct labour is a variable cost in this company.

Required:

How many minutes of mixing machine time would be required to satisfy demand for all four products?
How much of each product should be produced, rounded to the nearest whole unit, to maximize operating income?
Up to how much should the company be willing to pay, rounded to the nearest whole cent, for one additional minute of mixing machine time if the company has made the best use of the existing mixing machine capacity?

Reference no: EM133502582

Questions Cloud

Describe how human activities have caused climate change : Describe how human activities have caused climate change. What policies could be implemented to reduce the effects of climate change?

Calculate the number of basic and the number : Calculate the number of Basic and the number of Platinum that needs to be sold to break-even

What is the name of Australia main Act : What is the name of Australia's main Act that governs confidentiality and privacy at a national level? Include the year of the Act in its title.

What kinds of harm reduction policies and programs could be : Discuss some of the issues in the documentary B.A.T.A.M. Then apply some of the harm reduction strategies from the reading to this case. Are there harm

How many minutes of mixing machine time would be : How many minutes of mixing machine time would be required to satisfy demand for all four products and How much of each product should be produced, rounded

Strict liability crimes do not require mens rea or criminal : Strict liability crimes do not require mens rea or criminal intent. Consequently, individuals who do not have criminal or guilty minds.

Develop a meaningful set of criteria to evaluate the service : Develop a meaningful set of criteria to evaluate the services provided by the facility that you will be evaluating.

What is the net present value of this investment : suming a discount rate of 13%, what is the net present value (rounded to the nearest whole dollar) of this investment

What amount of sales dollars is required to earn : What amount of sales dollars is required to earn an annual profit of $750,000? Refer to the base case shown previously. What would the operating profit

User Account

All Pages