Question

# Bruce Corporation makes four products in a single facility. These products have the following unit product...

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

 Products A B C D Direct materials \$ 14.40 \$ 10.30 \$ 11.10 \$ 10.70 Direct labor 19.50 27.50 33.70 40.50 Variable manufacturing overhead 4.40 2.80 2.70 3.30 Fixed manufacturing overhead 26.60 34.90 26.70 37.30 Unit product cost \$ 64.90 \$ 75.50 \$ 74.20 \$ 91.80

Additional data concerning these products are listed below.

 Products A B C D Grinding minutes per unit 3.90 5.40 4.40 3.50 Selling price per unit \$ 76.20 \$ 93.60 \$ 87.50 \$ 104.30 Variable selling cost per unit \$ 2.30 \$ 1.30 \$ 3.40 \$ 1.70 Monthly demand in units 4,100 4,100 3,100 2,100

The grinding machines are potentially the constraint in the production facility. A total of 53,700 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?

Solution:

 Computation of total minutes of grinding machine time required to satisfy the demand for all products Minutes per unit Demand (Units) Total Minutes Required A 3.90 4100 15990 B 5.40 4100 22140 C 4.40 3100 13640 D 3.50 2100 7350 Total minutes required 59120

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