Asked by Rachel Dominguez on May 14, 2024
Verified
Glover Company makes three products in a single facility. These products have the following unit product costs:
Additional data concerning these products are listed below.
The mixing machines are potentially the constraint in the production facility. A total of 9,120 minutes are available per month on these machines.Direct labor is a variable cost in this company.Required:a. How many minutes of mixing machine time would be required to satisfy demand for all three products?b. How much of each product should be produced to maximize net operating income? (Round final answers to the nearest whole unit.)c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? (Round your intermediate calculations and final answer to 2 decimal places.)
Mixing Machines
Equipment used in various industries such as manufacturing and baking to combine ingredients or materials.
Maximize Net Operating Income
The objective to increase the difference between operating revenues and operating expenses, enhancing a business's profitability from its core operations.
- Identify which products to prioritize based on their profit margins and manufacturing restrictions.
- Adopt informed resolutions concerning the extra processing of commodities or selling them as they stand, following a cost-benefit examination.
Verified Answer
BB
Bukky BakareMay 19, 2024
Final Answer :
a. Demand on the mixing machine:
![a. Demand on the mixing machine: Total time required for all products: {{[a(26)]:#,###}} b. Optimal production plan: c. The company should be willing to pay up to the contribution margin per hour for the marginal job, which is ${{[a(43)]:#,##0.00}}.](https://d2lvgg3v3hfg70.cloudfront.net/TB8314/11eb6b8f_62ed_f848_bf83_b1b2576d4047_TB8314_00.jpg)
Total time required for all products: {{[a(26)]:#,###}}
b. Optimal production plan:
![a. Demand on the mixing machine: Total time required for all products: {{[a(26)]:#,###}} b. Optimal production plan: c. The company should be willing to pay up to the contribution margin per hour for the marginal job, which is ${{[a(43)]:#,##0.00}}.](https://d2lvgg3v3hfg70.cloudfront.net/TB8314/11eb6b8f_62ee_1f59_bf83_958b3197755d_TB8314_00.jpg)
c. The company should be willing to pay up to the contribution margin per hour for the marginal job, which is ${{[a(43)]:#,##0.00}}.
Total time required for all products: {{[a(26)]:#,###}}b. Optimal production plan:
c. The company should be willing to pay up to the contribution margin per hour for the marginal job, which is ${{[a(43)]:#,##0.00}}.
Learning Objectives
- Identify which products to prioritize based on their profit margins and manufacturing restrictions.
- Adopt informed resolutions concerning the extra processing of commodities or selling them as they stand, following a cost-benefit examination.
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