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The Gant Company produces three items in its manufacturing plant. The plant has a total capacity of 9,600 minutes per month for production. The following information is provided for the products:
Products
X Y Z
Direct material $16 $10 $14
Direct labor (all variable) 15 14 15
Variable overhead 2 3 4
Fixed overhead 20 23 30
Unit cost $53 $50 $63
Minutes required per unit 5 4 6
Selling price per unit $70 $65 $80
Variable selling expense per unit $5 $4 $2
Monthly demand in units 2,200 1,000 800
Required:
1. How many minutes would be required to meet the demand for all three products?
2. How many units of each product should Gant produce to maximize profit? Show your calculations!
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