Bruce Corporation makes four products in a single facility. These products have

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 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?

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

Explanation / Answer

Calculate How many minutes of grinding machine time would be required to satisfy demand for all four products :

Minutes = (4700*4.5+4700*6+3700*5+2700*4.10) = 78920 minutes

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