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In: Accounting

Whitacre Products Inc. makes two products—P32W and I90J. Product P32W's selling price is $42.00 and its...

Whitacre Products Inc. makes two products—P32W and I90J. Product P32W's selling price is $42.00 and its unit variable cost is $26.20. Product I90J's selling price is $320.00 and its unit variable cost is $196.00. The monthly demand is 3,300 units for product P32W and 900 units for I90J. The constrained resource is a particular machine that is available for 8,800 minutes each month. Each unit of product P32W requires 1 minutes on this machine and each unit of product I90J requires 10 minutes on this machine.
How many units of product I90J should be produced each month? (Round your intermediate calculations to 2 decimal places.)

550 units

330 units

900 units

560 units

Solutions

Expert Solution

Answer- Product I90J should be produced each month 550 units.

Explanation-

WHITACRE PRODUCTS INC.
Statement of Ranking
Products P32W I90J
$ $
Selling Price per Unit 42 320
Less:- Variable cost per unit 26.2 196
Contribution per unit 15.8 124
Minutes on the constraint 1 10
Contribution per minute of the constrained resource 15.8 12.4
Ranking 1 2
Statement of Optimum product mix
Products Ranking Machine Minutes per unit (a) Total units (b) Total machine hours c=(a*b)
P32W 1 1 3300 3300
I90J 2 10 550 5500 (Balancing Figure)
Total 8800

ekkarill92 answered 2 years ago
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