Homework SourseBruce Corporation makes four products in a single facility T
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Additional data concerning these products are listed below.
The grinding machines are potentially the constraint in the production facility. A total of 54,300 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?
Multiple Choice
78,920
18,600
57,770
54,300
| Products | ||||||||
| A | B | C | D | |||||
| Direct materials | $ | 15.00 | $ | 10.90 | $ | 11.70 | $ | 11.30 |
| Direct labor | 20.10 | 28.10 | 34.30 | 41.10 | ||||
| Variable manufacturing overhead | 5.00 | 3.40 | 3.30 | 3.90 | ||||
| Fixed manufacturing overhead | 27.20 | 35.50 | 27.30 | 37.90 | ||||
| Unit product cost | $ | 67.30 | $ | 77.90 | $ | 76.60 | $ | 94.20 |
Solution
Calculate grinding machine time would be required to satisfy demand for all four products :
So answer is a) 78920
| Minutes | |
| Product A | 4700*4.5 = 21150 |
| Product B | 4700*6 = 28200 |
| Product C | 3700*5 = 18500 |
| Product D | 2700*4.1 = 11070 |
| Total | 78920 |
