8. Holton Company makes three products in a single facility.Data concerning these products follow:Product...8....

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Accounting

8. Holton Company makes three products in a single facility.Data concerning these products follow:
Product
A B C
Selling price per unit $ 94.50 $ 79.60 $ 112.60
Direct materials $ 41.20 $ 44.40 $ 67.70
Direct labor $ 29.70 $ 14.20 $ 16.70
Variable manufacturing overhead $ 5.70 $ 4.80 $ 7.80
Variable selling cost per unit $ 7.20 $ 3.40 $ 4.80
Mixing minutes per unit 12.80 2.50 2.50
Monthly demand in units 3,000 1,000 2,000
The mixing machines are potentially the constraint in theproduction facility. A total of 14,000 minutes are available permonth on these machines.
Direct labor is a variable cost in this company.
Required:
a. How many minutes of mixing machine time would be required tosatisfy demand for all three products?
b. How much of each product should be produced to maximize netoperating income?
c. Up to how much should the company be willing to pay for oneadditional hour of mixing machine time if the company has made thebest use of the existing mixing machine capacity?

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In: Accounting8. Holton Company makes three products in a single facility.Data concerning these products follow:Product...8. Holton Company makes three products in a single facility.Data concerning these products follow:ProductABCSelling price per unit$94.50$79.60$112.60Direct materials$41.20$44.40$67.70Direct labor$29.70$14.20$16.70Variable manufacturing overhead$5.70$4.80$7.80Variable selling cost per unit$7.20$3.40$4.80Mixing minutes per unit12.802.502.50Monthly demand in units3,0001,0002,000The mixing machines are potentially the constraint in theproduction facility. A total of 14,000 minutes are available permonth on these machines.Direct labor is a variable cost in this company.Required:a. How many minutes of mixing machine time would be required tosatisfy demand for all three products?b. How much of each product should be produced to maximize netoperating income?c. Up to how much should the company be willing to pay for oneadditional hour of mixing machine time if the company has made thebest use of the existing mixing machine capacity?

	Product
	A		B		C
Selling price per unit	$	94.50	$	79.60	$	112.60
Direct materials	$	41.20	$	44.40	$	67.70
Direct labor	$	29.70	$	14.20	$	16.70
Variable manufacturing overhead	$	5.70	$	4.80	$	7.80
Variable selling cost per unit	$	7.20	$	3.40	$	4.80
Mixing minutes per unit		12.80		2.50		2.50
Monthly demand in units		3,000		1,000		2,000