The constraint at Bonavita Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:

-Assume that sufficient time is available on the constrained machine 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 this constrained resource?
A)$15.30 per minute
B)$18.80 per minute
C)$77.08 per unit
D)$122.10 per unit

Question

The constraint at Bonavita Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:

-Assume that sufficient time is available on the constrained machine 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 this constrained resource?
A)$15.30 per minute 
B)$18.80 per minute 
C)$77.08 per unit 
D)$122.10 per unit

Quizplus · Accepted Answer

The company should be willing to pay up to the contribution margin per minute of the least profitable product, which is $15.30 per minute, to acquire more of the constrained resource.

The Constraint at Bonavita Corporation Is Time on a Particular