Hofbauer Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product M73O requires 6 minutes on this machine and each unit of product M26B requires 8 minutes on this machine.
-Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?
A)$3.60 per minute
B)$28.80 per minute
C)$144 per minute
D)$4.80 per minute

Question

Hofbauer Corporation's two products have the following characteristics:  The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product M73O requires 6 minutes on this machine and each unit of product M26B requires 8 minutes on this machine.
-Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?
A)$3.60 per minute 
B)$28.80 per minute 
C)$144 per minute 
D)$4.80 per minute

Quizplus · Accepted Answer

11eaaee8_66cb_0c09_933a_ff79324471f5_TB5186_00 The most that the company should be willing to pay is $3.60 per minute,which is the profitability index of the least profitable product.

Hofbauer Corporation's Two Products Have the Following Characteristics: the Constrained