Asked by Nefetiti Easter on Apr 24, 2024
Verified
Assume that sufficient constraint time is available 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?
A) $12.40 per minute
B) $18.20 per minute
C) $129.22 per unit
D) $95.76 per unit
Constraint Time
The specific period during which a process, project, or operation is limited or restricted by various constraints.
Constrained Resource
A factor of production that is in limited supply, potentially restricting the output of goods and services.
Profitable Product
An item that brings in more income than the expenses related to its production and sale.
- Determine how much a company should be willing to pay to acquire more of a constrained resource.
Verified Answer
SW
shikoh wangariMay 02, 2024
Final Answer :
A
Explanation : 
The company should be willing to pay up to the contribution margin per minute for the marginal job, which is $12.40 per minute for TC.
Reference: CH11-Ref22
Bruce Corporation makes four products in a single facility.These products have the following unit product costs:
Additional data concerning these products are listed below. 
The grinding machines are potentially the constraint in the production facility.A total of 9,000 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
The company should be willing to pay up to the contribution margin per minute for the marginal job, which is $12.40 per minute for TC.Reference: CH11-Ref22
Bruce Corporation makes four products in a single facility.These products have the following unit product costs:
Additional data concerning these products are listed below. The grinding machines are potentially the constraint in the production facility.A total of 9,000 minutes are available per month on these machines.Direct labor is a variable cost in this company.
Learning Objectives
- Determine how much a company should be willing to pay to acquire more of a constrained resource.