Problem - The Gant Company produces three items in its manufacturing plant. The plant has a total capacity of 9,600 minutes per month for production. The following information is provided for the products:
|
|
Products
|
|
|
X
|
Y
|
Z
|
|
Direct material
|
$16
|
$10
|
$14
|
|
Direct labor (all variable)
|
15
|
14
|
15
|
|
Variable overhead
|
2
|
3
|
4
|
|
Fixed overhead
|
20
|
23
|
30
|
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Unit cost
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$53
|
$50
|
$63
|
|
Minutes required per unit
|
5
|
4
|
6
|
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Selling price per unit
|
$70
|
$65
|
$80
|
|
Variable selling expense per unit
|
$5
|
$4
|
$2
|
|
Monthly demand in units
|
2,200
|
1,000
|
800
|
Required:
a. How many minutes would be required to meet the demand for all three products?
b. How many units of each product should Gant product to maximize profit?