Reference no: EM131267727
Your Company makes three products in a single facility. These products have the following unit product costs:
Product X Product Y Product Z
Direct material $28.00 $26.00 $27.00
Direct labor 14.00 13.00 12.00
Variable manufacturing overhead 3.50 5.50 6.75
Fixed manufacturing overhead 25.00 29.00 22.00
Unit cost $70.50 $73.50 $67.75
Additional data concerning these products are listed below:
Product X Product Y Product Z
Mixing minutes per unit 2.5 4.0 5.0
Selling price per unit $80.00 $85.00 $79.00
Variable selling cost per unit $6.00 $5.00 $4.00
Monthly demand in units 1,750 3,500 3,000
The mixing machines are potentially the constraint in the production facility. A total of 30,000 minutes are available per month on these machines.
Direct labor is a variable cost in this company
How much of each product should be produced to maximize net operating income? (Round down to the nearest whole unit.)
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