Podkowka Corporation has two products that use the same constrained resource--a critical raw material. The total amount of the constrained resource available is 10,400 grams.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?
d.The company is considering launching a new product whose variable cost is $112 and that requires 10 grams of the constrained resource.What is the minimum selling price for the new product?

Question

Podkowka Corporation has two products that use the same constrained resource--a critical raw material.  The total amount of the constrained resource available is 10,400 grams.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?
d.The company is considering launching a new product whose variable cost is $112 and that requires 10 grams of the constrained resource.What is the minimum selling price for the new product?

Quizplus · Accepted Answer

The Answer of Podkowka Corporation has two products that use the same constrained resource--a critical raw material.  The total amount of the constrained resource available is 10,400 grams.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?
d.The company is considering launching a new product whose variable cost is $112 and that requires 10 grams of the constrained resource.What is the minimum selling price for the new product?

Podkowka Corporation Has Two Products That Use the Same Constrained