Glunn Company Makes Three Products in a Single Facility

question 22

Essay

Glunn 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:

Observational Study

A study where the researcher observes and records data without influencing the outcomes.

Self-Administered Survey

A data collection method where respondents fill out the questionnaire on their own, without the direct assistance of a researcher.

Demographic Variables

Characteristics of populations used in social science research, such as age, gender, income level, marital status, ethnicity, and education level.

Packaging Preference

Consumer's or user's favoritism towards the design, material, and functionality of packaging for products.