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The Active Company produces a product with the following unit information: Selling price $60.00 Variable cost $35.00 Fixed manufacturing cost per unit $12.00 Direct material

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The Active Company produces a product with the following unit information: Selling price $60.00 Variable cost $35.00 Fixed manufacturing cost per unit $12.00 Direct material (metres) required per unit 4.0 Direct labour hours required per unit 0.5 Machine hours required per unit 2.5 Required: 1. Calculate the profitability of the product if machine hours is the constraint (2 marks) 2. List two ways to relax the constraint identified in part 1 (2 marks) 3. What impact does a constraint have on a company? (1 mark)

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