Bruce Corporation makes four products in a single facility. These products have
ID: 2410820 • Letter: B
Question
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 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? (Round your intermediate calculations to 2 decimal places.)
Garrison 16e Rechecks 2017-09-13
Multiple Choice
Product D
Product A
Product C
Product B
Products A B C D Direct materials $ 16.90 $ 20.80 $ 13.80 $ 16.50 Direct labor 18.90 22.30 16.70 10.70 Variable manufacturing overhead 5.70 6.90 9.40 6.40 Fixed manufacturing overhead 28.80 15.70 15.80 17.80 Unit product cost 70.30 65.70 55.70 51.40Explanation / Answer
A
B
C
D
DM
16.90
20.80
13.80
16.50
DL
18.90
22.30
16.70
10.70
V. mfr OH
5.70
6.90
9.40
6.40
V.selling cost
2.65
3.35
4.10
4.80
Variable cost pu (A)
44.15
53.35
44
38.4
SP pu (B)
85.20
77.60
74.40
69.10
Contribution pu
(C =B-A)
41.05
24.25
30.4
30.7
Grinding minutes pu (D)
2.10
1.15
0.70
1
Contribution per griding minute (C/D)
19.54
21.09
43.43
30.7
Ranking
4th
3rd
1st
2nd
Product C makes most profitable use of grinding machine
A
B
C
D
DM
16.90
20.80
13.80
16.50
DL
18.90
22.30
16.70
10.70
V. mfr OH
5.70
6.90
9.40
6.40
V.selling cost
2.65
3.35
4.10
4.80
Variable cost pu (A)
44.15
53.35
44
38.4
SP pu (B)
85.20
77.60
74.40
69.10
Contribution pu
(C =B-A)
41.05
24.25
30.4
30.7
Grinding minutes pu (D)
2.10
1.15
0.70
1
Contribution per griding minute (C/D)
19.54
21.09
43.43
30.7
Ranking
4th
3rd
1st
2nd
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