REQUIRED: SHOW WHY MACHINE 1 IS THE CONSTRAINT.

hours equal the Machine 2 operating hours.) Costing with Constraints (15 marks) Bison, and Gray Jay. 551 employs a two-stage production process. The first stage is entirely automated using Stuffed Stuff Inc. ("S51) makes high-quality stuffed animals. It has five products: Beaver, Moose, Polar Bear. robotic machines, collectively called "Machine 1." Machine 1 cuts cloths based on exact product specifications, costs, to conduct the first stage task for any of the company's five products. In the second stage, hourly wage then prepares other necessary raw materials for the second stage. Machine 1 can be set up with no setup workers use sewing machines, collectively called "Machine 2," to do their tasks. (Hence, the direct labour workers sew the materials (prepared by Machine 1) to manufacture the final product, stuffed animals. All cost of Machine 1 is $2.50 per hour, and the operating cost of Machine 2 is $1.50 per hour. Annual production in the local labour market; thus the company experiences no shortage of hourly wage workers. The operating SSI pays its hourly wage workers $15.00 per hour. The company's high wage attracts many unskilled workers capacity of Machine 1 is 100,000 hours, and the annual production capacity of Machine 2 is 50,000 hours. The following table provides information about each product: annual demand; price; unit variable costs such as director material cost per unit and Machine 1 operating cost per unit; and direct labour minutes required to finish the product in the second stage. Direct Price ($/unit) Machine 1 Direct labour Product Material operating cost hours ($/unit) ($/unit) Demand (units) (mins/unit) 16 Beaver 10,000 $20 $4.50 $5.00 18 Moose 5,000 $32 $3.30 $12.50 14 Polar Bear $7.50 6,000 $25 $5.00 24 Bison 3,000 $35 $3.00 $10.00 6 $3.75 Gray Jay $12 24,000 $1.50