Marrin Corporation makes three products that use the current constraint-a particular type of machine. Data concerning those products appear below:
-Assume that sufficient constraint time is available 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 the constrained resource?
A)$14.30 per minute
B)$14.80 per minute
C)$33.81 per unit
D)$118.69 per unit

Question

Marrin Corporation makes three products that use the current constraint-a particular type of machine. Data concerning those products appear below: 
-Assume that sufficient constraint time is available 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 the constrained resource?
A)$14.30 per minute 
B)$14.80 per minute 
C)$33.81 per unit 
D)$118.69 per unit

Quizplus · Accepted Answer

The company should be willing to pay up to the contribution margin per unit of the constrained resource, which is $14.30 per minute, as this represents the additional profit that could be earned by producing more of the most profitable product.

Marrin Corporation Makes Three Products That Use the Current Constraint-A