Answer:
A. Total grinding minutes required = 28,600 minutes
B.
Of the 4, product D offers the highest profitability per grinding minute.
A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute
B. $62,640 divided by 9,860 minutes = $6.35 per grinding minute
C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute
D. $32,760 divided by 4,830/minutes = $6.70 per grinding minute
Explanation:
Bruce corporation
A.
Step 1 identify Grinding minutes per unit of product
A = 2.70
B = 3.40
C = 3.20
D = 2.30
Step 2. Identify Production units through monthly demand units
A = 2,900
B = 2,900
C = 1,900
D = 2,100
Step 3. Determine total grinding units required to fulfill demand.
A = 2,900 x 2.70 = 7,830
B = 2,900 x 3.40 = 9,860
C = 1,900 x 3.20 = 6,080
D = 2,100 x 2.30 = 4,830
Total grinding minutes required = 28,600
B.
Product profitability
Step 1. Determine product cost
Differentiate the product Costs and variable selling costs per unit from the unit selling prices.
A = 75.00 - 60.10 - 1.1 = 13.80
B = 92.40 - 70.70 - 0.1 = 21.60
C = 86.30 - 69.40 - 2.20 = 14.70
D = 103.10 - 87.00 - 0.50 = 15.60
Step 2. Multiply the profitability per unit with volume demanded to determine absolute value of profits made
A = 2,900 x 13.80 = $40,020
B = 2,900 x 21.60 = $62,640
C = 1,900 x 14.70 = $27,930
D = 2,100 x 15.60 = $32,760
Total profit = $163,350.
Step 3./determine the profit per grinding minute. To evaluate which product makes best use of the grinding machine
A. $40,020 divided by 7,830 minutes = $5.11 per grinding minute
B. $62,640 divided by 9,860 minutes = $6/35 per grinding minute
C. $27,930 divided by 6,080 minutes = $4.60 per grinding minute
D. $32,760 divided by 4,830/minutes = $6.7 per grinding minute
