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Broze Company: calculate a product manufacturing time

Question

Broze Company makes four products in a single facility. These products have the following unit product costs: 

 

 

Products

 

A

B

C

D

Direct materials

$13.80

$9.70

$10.50

$10.10

Direct labor

18.90

26.90

33.10

39.90

Variable manufacturing overhead

3.80

2.20

2.10

2.70

Fixed manufacturing overhead

26.00

34.30

26.10

36.70

Unit product cost

$62.50

$73.10

$71.80

$89.40

 

Additional data concerning these products are listed below.

 

 

Products

 

A

B

C

D

Grinding minutes per unit

3.30

4.60

3.80

2.90

Selling price per unit

$75.60

$93.00

$86.90

$103.70

Variable selling cost per unit

$1.70

$.70

$2.80

$1.10

Monthly demand in units

3,500

3,500

2,500

2,700

 

The grinding machines are potentially the constraint in the production facility. A total of 53,200 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?

a. 44,980

b. 9,600

c. 33,430

d. 53,200

 

 

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