Varix Company Makes Three Products in a Single Facility

question 63

Essay

Varix Company makes three products in a single facility.These products have the following unit product costs:

Additional data concerning these products are listed below.

The mixing machines are potentially the constraint in the production facility.A total of 24,200 minutes are available per month on these machines.Direct labor is a variable cost in this company.Required:
a.How many minutes of mixing machine time would be required to satisfy demand for all three products?
b.How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit. )
c.Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? (Round off to the nearest whole cent. )

---

Definitions:

Inorganic Compound

A chemical compound that lacks carbon-hydrogen bonds, typical of non-living chemical systems.

Organic Compound

A chemical compound containing carbon atoms bonded to other elements like hydrogen, oxygen, or nitrogen, fundamental to life on Earth.

Nonionic Compound

A chemical compound that does not ionize in water, exhibiting no electric charge.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.