ANSWER ALL

ACME is a chemical company that produces three chemicals: A, B, and C. The chemicals are manufactured in Department 1 and Department 2. Department 1 is responsible for the synthesis of chemicals, which mainly involves labor hours. Department 2 is responsible for production after the syntheses, which mainly involves machine hours. The current year has been challenging for ACME. Government restrictions on chemical imports since the previous year have reduced the availability of the direct materials needed for the production of the three products. A labor strike in one of the plants has also led to a decrease in available labor hours. ACME's management is planning its production schedule for the next six months. Available resources are as follows: Resources Availability Direct materials (kg) 14,000 Labor hours 3,000 Financial data for the three products, before the recent challenges, are presented below. ACME's inventory levels will not be increased or decreased during the next six months. The unit price and cost data presented below are valid for the next six months. Product A B C Selling price $60 $90 $120 Variable costs: Direct materials ($12 per kg) 30 36 72 Direct labor ($16 per hour) 12 20 16 Variable manufacturing overhead 3 12 8 Total variable cost 45 68 96 The forecasted product demands over the next six months are as follows: Product Demand (units) A 2,000 B l , 100 C 800 Questions: A. Describe the theory of constraints (TOC). B. What should be ACME's product mix strategy to maximize contribution margin when resources are constrained? C. Which of ACME's resources is constrained in the next six months? D. If ACME chooses to maximize contribution margin, how many units of products A, B, and C should it produce and sell? E. If ACME chooses to maximize throughput margin, how many units of products A, B, and C should it produce and sell