Use of the existing mixing machine machine capacity

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Reference no: EM131219525

Your company makes three products in a single facility. Data concerning these products follow: The mixing machines are potentialy the constraints 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. Products X Y Z Selling price per unit $80, $85,$79 Direct Materials $28, $26, $27 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 Variable selling cost per unit $6, $5, $4 Mixing minutes per unit 2.5, 4.0, 5.0 Monthly demand in unites 1,750, 3,500, 3,000 Require (SHOW ALL WORK): a. How many minutes of mixing machine time would be required to satisfy demand for all three products? b. How much of each product should be produced to maximize net operating income? (Round down to te nearest whole unit.) c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine machine capacity? (Round off to the nearest whole cents.)

Reference no: EM131219525

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