Bacon Company makes four products in a single facility. These products have the following unit product costs: Products A B C DDirect materials$14.30 $10.20 $11.00 $10.60 Direct labor 19.40 27.40 33.60 40.40 Variable manufacturing overhead 4.30 2.70 2.60 3.20 Fixed manufacturing overhead 26.50 34.80 26.60 37.20 Unit product cost$64.50 $75.10 $73.80 $91.40 Additional data concerning these products are listed below. Products A B C DGrinding minutes per unit 3.80 5.30 4.30 3.40 Selling price per unit$76.10 $93.50 $87.40 $104.20 Variable selling cost per unit$2.20 $1.20 $3.30 $1.60 Monthly demand in units 4,000 4,000 3,000 2,000 The grinding machines are the
constraint in the production facility. A total of 53,600 minutes is available per month on these machines.Direct labor is a variable cost in this company.Up to how much should the company be willing to pay for one additional minute of grinding machine time if the company has made the best use of the existing grinding machine capacity? (Round off to the nearest whole cent.)
A. $35.90
B. $11.60
C. $8.58
D. $0.00
Answer: C
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