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  • Dec 28, 2011, 12:06 AM
    kenadid
    Managerial accounting
    Please answer for me this question , but I don't have money I am in poor country , so I am waiting your answer.
    This is a question:

    Geary manufacturing has assembled the following data pertaining to its two most popular products.
    Blender Electric mixer
    Direct material $6 $11
    Direct labor $4 $9
    Manufacturing overheads @$16 per machine hour $16 $32
    Cost of purchasing from outside supplier $20 $38
    Annual demand (units) 20000 28000

    Past experience has shown that fixed manufacturing overhead component included in the cost per machine hour averages $10 , geary has a policy of filling all sales orders , even if it means purchasing units from outside supplier,
    Required:
    A. If 50000 machine hours are available , and geary manufacturing desires to follow an optimal strategy how many units of each product should the firm manufacture ? How many units of each product should geary purchase ?
    B. With all other things constant , if geary manufacturing is able to reduce the direct material for an electric mixer to $6 per unit , how many units of each product should be manufactured ? How many should be purchased?

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