Tillison Corporation makes three products that use the current constraint which is a particular type of machine. Data concerning those products appear below:

-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)$10.80 per minute
B)$69.44 per unit
C)$16.40 per minute
D)$14.04 per unit

Question

Tillison Corporation makes three products that use the current constraint which is a particular type of machine. Data concerning those products appear below:

-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)$10.80 per minute 
B)$69.44 per unit 
C)$16.40 per minute 
D)$14.04 per unit

Quizplus · Accepted Answer

The company should be willing to pay up to the contribution margin per minute of the constrained resource for the least profitable product, which is $10.80 per minute.

Tillison Corporation Makes Three Products That Use the Current Constraint