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Of the two types of labor (i.e., Pool 1 labor vs. Pool 2 labor), which is the most constrained resource? Goransson Company produces two products,
Of the two types of labor (i.e., Pool 1 labor vs. Pool 2 labor), which is the most constrained resource? Goransson Company produces two products, Product A and Product B. The selling price for Product A is $10 per unit; the selling price for Product B is $14 per unit. The variable costs for Product A are $6 per unit; the variable costs Product B are $9 per unit. Fixed costs per unit for Product A are $2 per unit; the fixed costs per unit for Product B are $3 per unit. Both products use two types of labor, from separate pools of employees: Pool 1 and Pool 2. For the upcoming accounting period, Pool 1 labor has 8,000 hours available. For the same accounting period, Pool 2 labor has 14,000 hours available. Product A uses 0.8 hours of Pool 1 labor and 1.0 hour of Pool 2 labor. Product B uses 1.2 hours of Pool 1 labor and 1.8 hours of Pool 2 labor. There is sufficient demand for each product (i.e., demand is not the most constrained resource)
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