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 Products Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $13.50 $9.40 $10.20 9.80 18.60 26.60 32.80 39.60 3.50 1.90 1.80 2.40 25.70 34.00 25.80 36.40 61.30 $71.90 $70.60 $88.20 Additional data concerning these products are listed below Products Grinding minutes per unit Selling price per unit Variable selling cost per unit Monthly demand in unitsS 3.00 .0 3.50 2.60 $75.30 $92.70 $86.60 $103.40 $ 1.40 $ 0.40 $ 2.50 $ 0.80 3,200 3,200 2,200 2,400 The grinding machines are potentially the constraint in the production facility. A total of 52,900 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?

Explanation / Answer

Grinding Machine time required for demad of all products

Machine time required = Demand of each product x grinding minutes required.

= 3,200 x 3 + 3,200 x 4 + 2,200 x 3.5 + 2,400 x 2.60 = 36,340 minutes

Since total machine hours available are more than the machine minutes required for grinding. Machine time total required is 36,340 minutes.

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