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 65,000 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Up to how much should the company be willing to pay for one additional minute of grinding machine time if the company has made the best use of the existing grinding machine capacity? (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $12.84

• $3.92

• $7.83

• $10.65

Answer 1

Answer of this Question is $ 7.83.

Explanantion:

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