Bacon Company Makes Four Products in a Single Facility $\quad$

question 122

Multiple Choice

Bacon Company makes four products in a single facility. These products have the following unit product costs:
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Products }$
$\begin{array}{lrrrr}&\text { A}&\text { B}&\text { C}&\text { D}\\\text { Direct materials } & \$ 14.30 & \$ 10.20& \$ 11.00& \$ 10.60 \\\begin{array}{l}\text { Direct labor }\end{array} & 19.40 & 27.40 & 33.60 & 40.40 \\\text { Variable manufacturing } & 4.30 & 2.70 & 2.60 & 3.20 \\\text { overhead } & & & & \\\text { Fixed manufacturing } & 26.50 & 34.80 & 26.60 & 37.20 \\\text { overhead } \\\text { Unit product cost }& \$ 64.50 & \$ 75.10 & \$ 73.80 & \$ 91.40\end{array}$
Additional data concerning these products are listed below.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Products }$
$\begin{array}{lrrrrrr}&\text { A}&\text { B}&\text { C}&\text { D}\\\text { Grinding minutes per unit } & 3.80 & 5.30& 4.30 & 3.40 \\\text { Selling price per unit } & \$ 76.1 0 & \$ 93.50 & \$ 87.40& \$ 104.20 \\\text { Variable selling cost per } & \$ 2.20 & \$ 1.20& \$ 3.30& \$ 1.60 \\\text { unit } \\\text { Monthly demand in units }& 4,000 & 4,000 & 3,00 0 & 2,000\end{array}$
The grinding machines are the constraint in the production facility. A total of 53,600 minutes is available per month on these machines.
Direct labor is a variable cost in this company.
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Which product makes the MOST profitable use of the grinding machines?

• A) Product A
• B) Product B
• C) Product C
• D) Product D

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Definitions:

Cognitions

Mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Cognitive Distortion

Faulty or biased ways of thinking that are believed to contribute to the maintenance of psychological disorders.

Mind Reading

A cognitive distortion where an individual believes they know the thoughts and intentions of others without sufficient evidence.

REBT

Rational Emotive Behavior Therapy (REBT) is a form of cognitive-behavioral therapy developed by Albert Ellis that emphasizes identifying irrational beliefs, challenging these beliefs, and ultimately changing behavioral and emotional responses.