The constraint at Dalbey Corporation is time on a particular machine. The compan

Question

The constraint at Dalbey Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:

Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of this constrained resource? (Round your intermediate calculations and final answer to 2 decimal places.)

State dollar amount per minute.

The constraint at Dalbey Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:

Explanation / Answer

Hi,

Please find the answer as follows;

The company should be willing to pay $12.85 per minute.

Answer is 12.85 per minute.

Thanks.

FE MB WP Selling price per unit 236 341.8 157.4 Variable cost per unit 162 245.88 103.44 Contribution (A) 74 95.92 53.96 Minutes on the constraint (B) 4 5.8 4.2 Contribution Margin Per Unit of the Constrained Resources (A)/(B) 18.50 16.54 12.85 Ranking 3 2 1

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