Question

Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $ 14.60 $ 10.50 $ 11.30 $ 10.90 Direct labor 19.70 27.70 33.90 40.70 Variable manufacturing overhead 4.60 3.00 2.90 3.50 Fixed manufacturing overhead 26.80 35.10 26.90 37.50 Unit product cost $ 65.70 $ 76.30 $ 75.00 $ 92.60 Additional data concerning these products are listed below. Products A B C D Grinding minutes per unit 4.10 5.60 4.60 3.70 Selling price per unit $ 76.40 $ 93.80 $ 87.70 $ 104.50 Variable selling cost per unit $ 2.50 $ 1.50 $ 3.60 $ 1.90 Monthly demand in units 4,300 4,300 3,300 2,300 The grinding machines are potentially the constraint in the production facility. A total of 53,900 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

Answer 1

Answer:

Bruce Corporation

Minutes of Grinding Machine Time required to satisfy demand for all four products:

Total Grinding Machine Time

Product A  = 4.10 minutes * 4,300 demand units = 17,630 minutes

Product B  = 5.60 minutes * 4,300 demand units = 24,080 minutes

Product C  = 4.60 minutes * 3,300 demand units = 15,180 minutes

Product D  = 3.70 minutes * 2,300 demand units = 8,500 minutes

Total = 65,400 minutes

Explanation:

The total minutes of Grinding Machine Time required to satisfy monthly demand for each product is calculated by multiplying the units demanded by the grinding minutes per unit.

This gives total minutes required for each product.  Then, when they are summed, the total Grinding Machine Time is obtained.

This total can be compared to the total available minutes per month of 53,900 to obtain the additional minutes required above the minutes available in order to satisfy the products' demands.