The Southeast Company Makes Three Products in One Manufacturing Facility

question 30

Multiple Choice

The Southeast Company makes three products in one manufacturing facility.Data regarding these products are as follows: $\begin{array}{llll} & \mathrm{A} & \mathrm{B} & \mathrm{C} \\\text { Direct Materials } & \$ 5.70 & \$ 6.20 & \$ 8.90 \\\text { Direct Labor } & 2.05 & 1.90 & 2.20 \\\text { Variable Overhead } & .70 & .80 & .90 \\\text { Fixed Overhead } & \underline{1.10} & \underline{1.40} & \underline{1.60}\\\text { Unit Product Cost } & \$ 9.55 & \$ 10.30 & \$ 13.60\\\\\text { Machine Hours Per Unit } & .5 & 1 & .25 \\\text { Selling Price per Unit } & \$ 16.00 & \$ 18.00 & \$ 20.00 \\\text { Demand (units) } & 1,200 & 1,400 & 800\end{array}$ If there are only 2,000 machine hours available, how much is the profit per machine hour for product A?

• A)$12.90
• B)$6.45
• C)$7.70
• D)$6.40

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Definitions:

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