The constraint at Pickrel 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?
A) $15.60 per minute
B) $13.10 per minute
C) $104.52 per unit
D) $27.36 per unit

Question

The constraint at Pickrel 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?
A) $15.60 per minute 
B) $13.10 per minute 
C) $104.52 per unit 
D) $27.36 per unit

Quizplus · Accepted Answer

11ea7761_1619_6ef0_81a5_83d4e7d41e01_TB2580_00 The company should be willing to pay up to the contribution margin per minute for the marginal job, which is $13.10 per minute for VD.

The Constraint at Pickrel Corporation Is Time on a Particular