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Answered) Chef Gourmet, Inc., has assembled the following data pertaining to its two most popular products. Food Blender Processor Direct material $ 20 $ 28...


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Chef Gourmet, Inc., has assembled the following data pertaining to its two most popular products. Food Blender Processor
Direct material $ 20 $ 28
Direct labor 13 41
Manufacturing overhead @ $50 per machine hour 50 100
Cost if purchased from an outside supplier 70 136
Annual demand (units) 36,000 44,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per
machine hour averages $25. Management has a policy of filling all sales orders, even if it means
purchasing units from outside suppliers. Required: 1. If 76,000 machine hours are available, and management desires to follow an optimal strategy, how many
units of each product should the firm manufacture? How many units of each product should be
purchased? ———
—-— 2. With all other things constant, if management is able to reduce the direct material for a food processor to
$20 per unit, how many units of each product should be manufactured? Purchased? —-:—
———

 


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