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ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Fixed overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product B A $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 $2.10 $10.80 $11.90 The following additional data for these products are available: Product A Product B $59.30 $51.70 1.20 mins 0.70 mins $3.60 Product с $20.80 4,000 $10.50 $1.50 2,000 $2.00 $8.80 Product C 0.60 mins $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?

ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Fixed overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product B A $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 $2.10 $10.80 $11.90 The following additional data for these products are available: Product A Product B $59.30 $51.70 1.20 mins 0.70 mins $3.60 Product с $20.80 4,000 $10.50 $1.50 2,000 $2.00 $8.80 Product C 0.60 mins $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product A B $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 Fixed overhead The following additional data for these products are available: $2.10 $59.30 $10.80 $11.90 $8.80 $3.60 Product A Product B Product C 4,000 Product с $20.80 1.20 mins 0.70 mins 0.60 mins $10.50 $51.70 $2.00 $1.50 2,000 $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?
Transcribed Image Text:ABC Corporation makes three products in a single facility. These products have the following unit product costs: Direct materials Direct labor Variable overhead Machine time per unit (in minutes) Selling price per unit Sales commission per Product Product A B $19.90 $15.20 unit Monthly demand in units $12.20 $8.70 $1.60 Fixed overhead The following additional data for these products are available: $2.10 $59.30 $10.80 $11.90 $8.80 $3.60 Product A Product B Product C 4,000 Product с $20.80 1.20 mins 0.70 mins 0.60 mins $10.50 $51.70 $2.00 $1.50 2,000 $59.50 $2.20 4,000 Machine time is a constrained resource in ABC's production facility. If a total of 9,000 minutes of machine time is available per month, then which product makes the most profitable use of the company's machines?
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