The constraint at Rauchwerger Corporation is time on a particular machine. The c

Question

The constraint at Rauchwerger 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 the constrained resource? (Round your intermediate calculations to 2 decimal places.)

WX KD FS Selling price per unit $ 335.21 $ 228.49 $ 199.24 Variable cost per unit $ 259.20 $ 173.02 $ 159.55 Minutes on the constraint 7.80 4.60 5.80

Explanation / Answer

Answer:

WX

KD

FS

Selling price per unit

335.21

228.49

199.24

Less:

Variable cost per unit

259.2

173.02

159.55

Contribution margin (A)

76.01

55.47

39.69

Devided by

Minutes on the constraint (b)

7.8

4.6

5.8

Contribution margin per minute(A/B)

9.74

12.06

6.84

Rank

2

1

3

The company be willing to pay to acquire more of the constrained resource is $6.84

WX

KD

FS

Selling price per unit

335.21

228.49

199.24

Less:

Variable cost per unit

259.2

173.02

159.55

Contribution margin (A)

76.01

55.47

39.69

Devided by

Minutes on the constraint (b)

7.8

4.6

5.8

Contribution margin per minute(A/B)

9.74

12.06

6.84

Rank

2

1

3

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.