Question
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
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 | $ | 325.99 | $ | 543.25 | $ | 513.00 | |||
| Variable cost per unit | $ | 251.99 | $ | 420.80 | $ | 397.65 | |||
| Time on the constraint (minutes) |
| 4.60 |
| 8.30 |
| 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 in the order in which they should be emphasized i.e. 1, 2 and 3
| Product | Ranking |
| GK |
|
| LQ |
|
| XK |
|
b. 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? (Round your answer to 2 decimal places.)
| Additional Amount for constrained resource | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Forensic And Investigative Accounting
Authors: D. Larry Crumbley, Lester E. Heitger, G. Stevenson Smith
7th Edition
0808040731, 9780808040736
