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. )

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Definitions:

Reminder

A communication tool used to prompt or encourage an audience to remember and consider a product, service, event, or message.

Sex Appeals

The use of sexually suggestive or erotic imagery in advertising to draw interest to a product or service, often provoking emotional responses from the audience.

Younger Audiences

Target demographic groups composed of younger individuals, typically children and teenagers, with specific consumer habits and preferences.

Recall, Recognition

The ability to remember (recall) information or to identify (recognition) previously encountered information or experiences.