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Solution Library
Broze Company: calculate a product manufacturing time
Question
Broze Company makes four products in a single facility. These products have the following unit product costs:
|
Products |
||||
|
A |
B |
C |
D |
|
|
Direct materials |
$13.80 |
$9.70 |
$10.50 |
$10.10 |
|
Direct labor |
18.90 |
26.90 |
33.10 |
39.90 |
|
Variable manufacturing overhead |
3.80 |
2.20 |
2.10 |
2.70 |
|
Fixed manufacturing overhead |
26.00 |
34.30 |
26.10 |
36.70 |
|
Unit product cost |
$62.50 |
$73.10 |
$71.80 |
$89.40 |
Additional data concerning these products are listed below.
|
Products |
||||
|
A |
B |
C |
D |
|
|
Grinding minutes per unit |
3.30 |
4.60 |
3.80 |
2.90 |
|
Selling price per unit |
$75.60 |
$93.00 |
$86.90 |
$103.70 |
|
Variable selling cost per unit |
$1.70 |
$.70 |
$2.80 |
$1.10 |
|
Monthly demand in units |
3,500 |
3,500 |
2,500 |
2,700 |
The grinding machines are potentially the constraint in the production facility. A total of 53,200 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
How many minutes of grinding machine time would be required to satisfy demand for all four products?
a. 44,980
b. 9,600
c. 33,430
d. 53,200
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