8. The constraint at Johngrass Corporation is time on a particular machine. The company makes three...

8.

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

	VT	UV	LQ
Selling price per unit	$334.97	$228.25	$199.00
Variable cost per unit	$259.68	$173.50	$160.03
Minutes on the constraint	5.40	3.70	3.40

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 your intermediate calculations and final answer to 2 decimal places.)

A. $14.80 per minute

B. $11.46 per minute

C. $75.29 per unit

D. $38.97 per unit

Expert Solution

particulars	VT	UV	LQ
Contribution margin	$ 75.39	$ 54.75	$ 38.97
(selling price- Variable cost)	(334.97-259.68)	(228.25-173.50)	(199.00-160.03)
minutes	5.4	3.7	3.4
Contribution margin per minutes	$ 13.96	$ 14.80	$ 11.46
	75.39/5.4	54.75/3.7	38.97/3.4
preference	ii	i	iii
therefore option "B" IS correct that is 11.46 per minutes

ekkarill92 answered 1 year ago

1. Brissett Corporation makes three products that use the current constraint, which is a particular type...

1. Brissett Corporation makes three products that use the current constraint, which is a particular type of machine. Data concerning those products appear below: GK LQ XK Selling price per unit $ 326.07 $ 543.33 $ 517.00 Variable cost per unit $ 252.03 $ 420.84 $ 397.69 Time on the constraint (minutes) 4.20 8.10 8.00 Required: a. Rank the products in order of their current profitability from the most profitable to the least profitable. In other words, rank the products...

Product Mix Decision, Single Constraint Behar Company makes three types of stainless steel frying pans. Each...

Product Mix Decision, Single Constraint Behar Company makes three types of stainless steel frying pans. Each of the three types of pans requires the use of a special machine that has total operating capacity of 173,050 hours per year. Information on each of the three products is as follows: Basic Standard Deluxe Selling price $11.68 $17.78 $34.40 Unit variable cost $6.58 $11.72 $16.02 Machine hours required 0.10 0.20 0.50 The marketing manager has determined that the company can sell all...

The constraint at Vrana Inc. is an expensive milling machine. The three products listed below use...

The constraint at Vrana Inc. is an expensive milling machine. The three products listed below use this constrained resource. JH KW DF Selling Price Per Unit $ 404.58 $ 478.74 $ 358.44 Variable Cost Per Unit $ 308.88 $ 371.30 $ 285.36 Time on the Milling Machine 6.60 7.90 5.80 Monthly Demand - Units 7,500 8,400 6,000 Prepare a schedule to determine the rank of each of the products, then answer the following questions by selecting the correct answer from...

The time required to service a particular machine is an exponential random variable with mean 10...

The time required to service a particular machine is an exponential random variable with mean 10 minutes. If a repair person has 35 machines to service, compute the approximate probability that all the work can be completed in under 5 hours.

8. Holton Company makes three products in a single facility. Data concerning these products follow: Product...

8. Holton Company makes three products in a single facility. Data concerning these products follow: Product A B C Selling price per unit $ 94.50 $ 79.60 $ 112.60 Direct materials $ 41.20 $ 44.40 $ 67.70 Direct labor $ 29.70 $ 14.20 $ 16.70 Variable manufacturing overhead $ 5.70 $ 4.80 $ 7.80 Variable selling cost per unit $ 7.20 $ 3.40 $ 4.80 Mixing minutes per unit 12.80 2.50 2.50 Monthly demand in units 3,000 1,000 2,000 The...

Technostrain Corporation manufactures two products: X and Y. The company has 4,000 hours of machine time...

Technostrain Corporation manufactures two products: X and Y. The company has 4,000 hours of machine time available and can sell no more than 800 units of product X. Other pertinent data follow. Product X Product Y Selling price $ 8.00 $ 19.00 Variable cost 3.00 5.00 Fixed cost 3.50 6.25 Machine time per unit 2 hours 3 hours Which of the following is Technostrain’s objective function? Multiple Choice Maximize Z = 8X + 19Y. Maximize Z = 1.50X + 7.75Y....

If your company makes a particular decision in the face of uncertainty, you estimate that it...

If your company makes a particular decision in the face of uncertainty, you estimate that it will either gain $10,000, gain $1000, or lose $5000, with probabilities 0.40, 0.30, and 0.30, respectively. You (correctly) calculate the EMV as $2800. However, you distrust the use of this EMV for decision-making purposes. After all, you reason that you will never receive $2800, you will receive $10,000, $1000, or lose $5000." suppose you have the option of receiving a check for $2700 instead...

A corporation is considering purchasing a machine that has an 8-year life and will save the...

A corporation is considering purchasing a machine that has an 8-year life and will save the firm $3,825 per year in net operating costs. The machine would be depreciated on a straight-line basis to a zero salvage value. The firm has a 21% tax rate and a 14% p.a. required rate of return on this project. a. If the machine costs $22,000, should it be purchased? b. If the machine can be leased for $3,400 per year payable at the...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will generate cash inflows of $96,000 each year. The salvage value at the end of the project is $80,000. Your Company's discount rate is 6%. The net present value of the investment is ($7,500). What is the purchase price of the machine?

Constrained Optimization: One Internal Binding Constraint Patz Company produces two types of machine parts: Part A...

Constrained Optimization: One Internal Binding Constraint Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of $200 and $400, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 200 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. Objective...

Question