Cranston Corporation makes four products in a single facility. Data concerning these products appear below: The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines.Which product makes the LEAST profitable use of the milling machines? (Round your intermediate calculations to 2 decimal places.)
A) Product A
B) Product B
C) Product C
D) Product D

Question

Cranston Corporation makes four products in a single facility. Data concerning these products appear below:  The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines.Which product makes the LEAST profitable use of the milling machines? (Round your intermediate calculations to 2 decimal places.)
A) Product A 
B) Product B 
C) Product C 
D) Product D

Quizplus · Accepted Answer

To determine which product makes the least profitable use of the milling machines, we need to calculate the contribution margin per minute of milling machine time for each product.

Product A: 189/12,600 = $0.015/minute 
Product B: 216/8,400 = $0.026/minute 
Product C: 218/8,400 = $0.026/minute 
Product D: 180/5,400 = $0.033/minute

Therefore, Product B makes the least profitable use of the milling machines, as it has the lowest contribution margin per minute of milling machine time.

The best choice is to reduce or eliminate production of Product B in order to free up milling machine time and increase profitability.

Cranston Corporation Makes Four Products in a Single Facility