Glunn Company makes three products in a single facility. These products have the following unit revenue and cost data:
Product
- A B C .
- Selling Price per unit $ 59.20 $ 60.10 $55.30
- Variable Costs per unit:
- Direct Materials...................... 12.80 9.30 4.70
- Direct Labor.......................... 14.10 14.90 10.00
- Variable Mfg overhead............. 1.20 0.90 0.50
- Variable selling cost per unit....... 2.90 2.70 3.70
- Fixed Mfg overhead per unit ......... 18.50 17.20 23.70
Additional data concerning these products are listed below.
- Mixing minutes per unit.......... 3.70 3.40 3.90
- Monthly demand in units........ 2,000 4,000 2,000
The mixing machines are potentially the constraint in the production facility. A total of 24,200 minutes are available per month on these machines. .
a. How many minutes of mixing machine time would be required to satisfy demand for all three products?
b. Considering the constraint; Calculate how much money is made per constraint for all three products. What is the most profitable product? What is the least profitable product? Show your work!
C. (3 points) How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.)