The constraint at Artis 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) $12.40 per minute
B) $12.80 per unit
C) $15.10 per minute
D) $58.89 per unit

Question

The constraint at Artis 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) $12.40 per minute 
B) $12.80 per unit 
C) $15.10 per minute 
D) $58.89 per unit

Quizplus · Accepted Answer

The company should be willing to pay up to the contribution margin per minute of the constrained resource for the least profitable product, which is $12.40 per minute.

The Constraint at Artis Corporation Is Time on a Particular