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Category > Accounting Posted 10 Aug 2017 My Price 6.00

Brown Corporation

Brown Corporation makes four products in a single facility. These products have the following unit product costs:

 

Products
  A B C D
  Direct materials $17.60 $21.50 $14.50 $17.20
  Direct labor 19.60 23.00 17.40 11.40
  Variable manufacturing overhead 6.40 7.60 10.10 7.10
  Fixed manufacturing overhead

29.50

16.40

16.50

18.50
  Unit product cost

$73.10

$68.50

$58.50

$54.20


Additional data concerning these products are listed below.

 

Products
  A B C D
  Grinding minutes per unit 2.45 1.50 1.05 1.35
  Selling price per unit $88.70 $81.10 $77.90 $72.60  
  Variable selling cost per unit $3.35 $4.05 $4.80 $5.50
  Monthly demand in units 5,000 4,000 4,000 6,000.00

The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company.

Which product makes the MOST profitable use of the grinding machines?

  Product B
  Product A
  Product D
  Product C

 

Answers

Maurice Tutor
(5)
Status NEW Posted 10 Aug 2017 11:08 AM My Price 6.00

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