Question

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

WX KD FS
Selling price per unit $335.20 $228.48 $199.23
Variable cost per unit $259.22 $173.04 $159.57
Minutes on the constraint 7.70 4.50 5.70

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 intermediate calculations to 2 decimal places.

a. $75.98 per minute
b. $6.96 per minute
c. $39.66 per minute
d. $12.32 per minute

Answer 1

Answer:

the least profitable is $39.66 per unit or 9.72 per minute

Explanation:

The computation is shown below:

The Price Per Unit for WX is

= $355.20 - $259.22

= $95.98

Price Per Unit for KD is

= $228.48 - $173.04

= $55.44

And, the Price Per Unit for FS is

= $199.23 - $159.57

= $39.66

Now

Price per Minute for WX is

= $95.98 ÷ 7.70

= 12.46

Price Per Minute for KD is

= $55.44 ÷ 4.50

= 12.32

And, Price Per Minute for FS is

= $55.44 ÷ 5.70

= 9.72

So here the least profitable is $39.66 per unit or 9.72 per minute

This is the answer but the same is not provided