Production under resource constraint
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Johnson Company produces three products (A,B,C). During the coming period, Johnson anticipates to have 7,500 direct labor hours and 5,500 machine hours available. Provided the following data, calculate how much of each product Johnson should produce (assume that Johnson maintains no inventories of finished product). Direct labor cost is $28/hour.
A B C
Direct materials cost/unit $55 $86 $102
Variable overhead/unit $23 $40 $39
Fixed overhead/unit $52 $65 $74
Selling price/unit $240 $400 $460
Labor hours/unit 1.5 3.5 3
Machine hours/unit 1 2.5 3
Forecast demand in units 1,400 1,100 700.
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Solution Summary
The solution explains how to decide the production mix given a resource constraint.
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See the attached file.
Johnson Company produces three products (A,B,C). During the coming period,
Johnson anticipates to have 7,500 direct labor hours and 5,500 machine hours
available. Provided the following data, calculate how much of each product
Johnson should produce (assume that Johnson maintains no inventories of
finished product). Direct labor cost is $28/hour.
A B C
Direct materials cost/unit $55 $86 $102
Variable overhead/unit $23 $40 $39
Fixed ...
Purchase this Solution
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