Deck 15: Profitability Analysis

Question 1

The opportunity cost of using one unit of the constrained resource in a volume trade-off decision is equal to:

A)the profitability index for the company's best selling product.
B)the profitability index for the product whose production would be cut back if necessary.
C)the profitability index of the product with the fastest growing sales.
D)the profitability index of the company's most profitable product.

Answer 1

B

Question 2

Manchester Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.For example,the selling price of product G94T is $304.00 and its unit variable cost is $243.20.One unit of the product requires 16 ounces of the constrained resource.Monthly sales are 9,300 units.What is the profitability index for product G94T?

A)$565,440
B)0.20
C)$3.80 per ounce
D)$19.00 per ounce

Answer 2

C
Explanation: Profitability Index = Incremental profit  Amount of constrained resource required = $60.80*  16 ounces = $3.80 per ounce
* $60.80 = $304.00 - $243.20

Question 3

Mccraig Corporation would like to determine the relative profitability of a number of jobs.For example,job S35A has revenues of $52,000 and avoidable costs of $36,400,resulting in an incremental profit of $15,600.The job requires 260 hours of the constrained resource.The job is responsible for 8% of the company's total profit for the period.What is the profitability index for job S35A?

A)$60 per hour
B)$200 per hour
C)0.30
D)0.08

Answer 3

A
Explanation: Profitability Index = Incremental profit  Amount of constrained resource required = $15,600  260 hours = $60 per hour

Question 4

In the absence of a constraint,all business segments that are relatively profitable should be retained.

Question 5

Letze Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.The company has provided the following data for product I69Y: What is the profitability index for product I69Y?

A)$109,120
B)0.20
C)$22.00 per minute
D)$4.40 per minute

Question 6

Tevlin Corporation would like to determine the relative profitability of a number of jobs.For illustration purposes,the company has provided the following data for job H90X: What is the profitability index for job H90X?

A)$224 per hour
B)$560 per hour
C)$336 per hour
D)0.40

Question 7

When long-term investment funds are the constraint and the company is choosing from among potential long-term projects,the profitability index should be computed by dividing the total expected revenues from the project by the amount of long-term investment funds required by the project.

Question 8

A company that makes horsehair cowboy belts cannot meet the demand for belts due to a limited supply of artisans who know how to make the belts.To determine which models of the cowboy belts should be emphasized,the company should rank the models by dividing the selling price of each model by the amount of time an artisan requires to make the model.

Question 9

The opportunity cost of using a unit of the constrained resource in a volume trade-off decision is determined by the profitability index of the company's least profitable product--even if none of that product is currently being made.

Question 10

Relative profitability should be measured by dividing the incremental profit from a segment by the amount of the constrained resource required by that segment.

Question 11

When long-term investment funds are the constraint and the company is choosing from among potential long-term projects,the profitability index should be computed by dividing the net present value of a project by the expected total revenues from the project.

Question 12

The profitability index for a volume trade-off decision involving products should be computed by dividing the unit contribution margin of a product by the selling price of the product.

Question 13

Alberding Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.For illustration,the company has provided the following data for product S06K: What is the profitability index for product S06K?

A)$6.00 per gram
B)$2.40 per gram
C)0.40
D)$367,200

Question 14

Rognstad Corporation would like to determine the relative profitability of a number of jobs.For illustration purposes,the company has provided the following data for job M38S: What is the profitability index for job M38S?

A)$360 per hour
B)0.20
C)0.40
D)$144 per hour

Question 15

When a company has a production constraint,the selling price of any new product should cover both its variable cost and the opportunity cost involved in using the constrained resource.

Question 16

Wang Corporation would like to determine the relative profitability of a number of jobs.For example,the revenue from Job Q86D is $105,300 and its avoidable costs amount to $63,180,resulting in an incremental profit of $42,120.Furthermore,the job requires 270 hours of the constrained resource.What is the profitability index for job Q86D?

A)0.40
B)$234 per hour
C)$156 per hour
D)$390 per hour

Question 17

If a company is considering accepting a number of jobs,but there is insufficient production capacity to do all of them,then the profitability index can be used to rank the jobs and decide which should be accepted.

Question 18

Relative profitability measures should only be used when:

A)absolute profitability measures fail to provide a decision.
B)absolute profitability measures cannot be used.
C)a constraint forces a trade-off among segments.
D)market shares are falling.

Question 19

Relative profitability is concerned with ranking business segments for the purpose of making trade-offs among the segments.

Question 20

Dombrowski Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.For example,the selling price of product V48Q is $150.00,its unit variable cost is $135.00,and its unit contribution margin is $15.00.One unit of the product requires 6 minutes of the constrained resource.Monthly sales are 5,800 units.What is the profitability index for product V48Q?

A)$2.50 per minute
B)0.10
C)$25.00 per minute
D)$87,000

Question 21

Deemer Corporation has provided the following data concerning its two products: The profitability index for product T57U is closest to:

A)0.06
B)0.20
C)$11.00 per ounce
D)$2.20 per ounce

Question 22

What is the maximum contribution margin the company can earn per month?

A)$144,270
B)$114,045
C)$107,781
D)$101,370

Question 23

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)$120.90 per minute
B)$9.30 per minute
C)$13.20 per minute
D)$66.00 per minute

Question 24

Blomstrom Products Inc.makes two products--N81W and V55S.Product N81W's selling price is $20.00 and its unit variable cost is $12.00.Product V55S's selling price is $108.00 and its unit variable cost is $97.20.The monthly demand is 3,940 units for product N81W and 1,140 units for V55S.The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product N81W requires 2 minutes on this machine and each unit of product V55S requires 6 minutes on this machine.
The company is considering launching a new product that would have a variable cost of $155.00 per unit and no avoidable fixed costs.It would require 5 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$175.00
B)$156.80
C)$164.00
D)$155.00

Question 25

The company is considering launching a new product that would have a variable cost of $117.00 per unit.It would require 6 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$126.30
B)$172.80
C)$117.00
D)$196.20

Question 26

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 27

Blomstrom Products Inc.makes two products--N81W and V55S.Product N81W's selling price is $20.00 and its unit variable cost is $12.00.Product V55S's selling price is $108.00 and its unit variable cost is $97.20.The monthly demand is 3,940 units for product N81W and 1,140 units for V55S.The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product N81W requires 2 minutes on this machine and each unit of product V55S requires 6 minutes on this machine.
How many units of product V55S should be produced each month?

A)420
B)1,140
C)2,453
D)0

Question 28

Ryce Corporation is about to announce a new product,C72,whose variable cost is $118.70 per unit and that would require 9.40 grams of a raw material that is the constrained resource in the company.The opportunity cost to use this constrained resource is $60.00 per gram.What is the minimum acceptable selling price for the new product?

A)$564.00
B)$178.70
C)$682.70
D)$118.70

Question 29

Kiefert Corporation has provided the following data concerning its two products--A70 and O48: The total amount of the constrained resource available each month is 54,800 grams.Each unit of product A70 requires 8 grams of the constrained resource and each unit of product O48 requires 18 grams.What is the maximum contribution margin the company can earn per month?

A)$447,680
B)$508,160
C)$424,500
D)$413,120

Question 30

Macha Corporation has four different products that use the same constrained resource.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

A)N400
B)N300
C)N200
D)N100

Question 31

The management of Cerruto Corporation has provided the following data concerning its two products: The constrained resource is a particular machine that is available for 9,600 minutes each month.
How many units of product U87D should be produced each month?

A)500
B)250
C)988
D)0

Question 32

The management of Dando Corporation has provided the following data concerning its two products: The constrained resource is a particular machine that is available for 10,100 minutes each month.
How many units of product Y43L should be produced each month?

A)0
B)700
C)1,328
D)382

Question 33

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.
How many units of product M26B should be produced each month?

A)0
B)280
C)2,000
D)980

Question 34

Blomstrom Products Inc.makes two products--N81W and V55S.Product N81W's selling price is $20.00 and its unit variable cost is $12.00.Product V55S's selling price is $108.00 and its unit variable cost is $97.20.The monthly demand is 3,940 units for product N81W and 1,140 units for V55S.The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product N81W requires 2 minutes on this machine and each unit of product V55S requires 6 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)$4.00 per minute
B)$1.80 per minute
C)$8.00 per minute
D)$10.80 per minute

Question 35

Larsen Corporation has designed a new product,J57,whose variable cost is $61.80 per unit and that requires 3.30 minutes of the constrained resource.The opportunity cost is $31.00 per minute used of the constrained resource.What is the minimum acceptable selling price for the new product?

A)$92.80
B)$61.80
C)$102.30
D)$164.10

Question 36

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.
The company is considering launching a new product that would have a variable cost of $169.00 per unit and no avoidable fixed costs.It would require 16 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$226.60
B)$245.80
C)$169.00
D)$172.60

Question 37

Blomstrom Products Inc.makes two products--N81W and V55S.Product N81W's selling price is $20.00 and its unit variable cost is $12.00.Product V55S's selling price is $108.00 and its unit variable cost is $97.20.The monthly demand is 3,940 units for product N81W and 1,140 units for V55S.The constrained resource is a particular machine that is available for 10,400 minutes each month.Each unit of product N81W requires 2 minutes on this machine and each unit of product V55S requires 6 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$30,968
B)$43,832
C)$36,056
D)$26,552

Question 38

The same constrained resource is used by four different products at Debruin Corporation.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

A)R400
B)R300
C)R100
D)R200

Question 39

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.
What is the maximum contribution margin the company can earn per month?

A)$43,805
B)$47,232
C)$67,392
D)$40,512

Question 40

Vanstraten Corporation has provided the following data concerning its two products: The profitability index for product Z63Z is closest to:

A)$4.20 per gram
B)0.53
C)0.20
D)0.57

Question 41

The management of Dando Corporation has provided the following data concerning its two products: The constrained resource is a particular machine that is available for 10,100 minutes each month.
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)$40.00 per minute
B)$8.00 per minute
C)$4.00 per minute
D)$32.00 per minute

Question 42

Demeester Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 9,900 minutes each month.Each unit of product Y56G requires 10 minutes on this machine and each unit of product K46X requires 3 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$23,100
B)$25,020
C)$31,500
D)$21,420

Question 43

Lilienthal Products Inc.makes two products--M38O and E34G.Product M38O's selling price is $145.00 and its unit variable cost is $87.00.Product E34G's selling price is $300.00 and its unit variable cost is $210.00.The monthly demand is 1,590 units for product M38O and 640 units for E34G.The constrained resource is a particular machine that is available for 10,100 minutes each month.Each unit of product M38O requires 5 minutes on this machine and each unit of product E34G requires 10 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$149,820
B)$105,448
C)$111,570
D)$100,520

Question 44

Fontana Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 9,800 minutes each month.Each unit of product S83E requires 16 minutes on this machine and each unit of product G29P requires 5 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)$3.20 per minute
B)$2.40 per minute
C)$16.00 per minute
D)$38.40 per minute

Question 45

Kuchler Corporation has four products that use the same constrained resource.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

A)U400
B)U200
C)U300
D)U100

Question 46

Wakeman Products Inc.makes two products--W28H and Z28D.Product W28H's selling price is $27.00 and its unit variable cost is $21.60.Product Z28D's selling price is $170.00 and its unit variable cost is $153.00.The monthly demand is 2,030 units for product W28H and 730 units for Z28D.The constrained resource is a particular machine that is available for 9,500 minutes each month.Each unit of product W28H requires 3 minutes on this machine and each unit of product Z28D requires 10 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)$17.00 per minute
B)$1.70 per minute
C)$1.80 per minute
D)$5.40 per minute

Question 47

Florez Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 10,000 minutes each month.Each unit of product U98W requires 19 minutes on this machine and each unit of product M01S requires 7 minutes on this machine.
How many units of product U98W should be produced each month?

A)180
B)0
C)390
D)736

Question 48

Wakeman Products Inc.makes two products--W28H and Z28D.Product W28H's selling price is $27.00 and its unit variable cost is $21.60.Product Z28D's selling price is $170.00 and its unit variable cost is $153.00.The monthly demand is 2,030 units for product W28H and 730 units for Z28D.The constrained resource is a particular machine that is available for 9,500 minutes each month.Each unit of product W28H requires 3 minutes on this machine and each unit of product Z28D requires 10 minutes on this machine.
How many units of product Z28D should be produced each month?

A)341
B)730
C)0
D)1,339

Question 49

Mcbee Products Inc.makes two products--C38S and V81Z.Product C38S's selling price is $91.00 and its unit variable cost is $72.80.Product V81Z's selling price is $200.00 and its unit variable cost is $180.00.The monthly demand is 890 units for product C38S and 680 units for V81Z.The constrained resource is a particular machine that is available for 10,000 minutes each month.Each unit of product C38S requires 7 minutes on this machine and each unit of product V81Z requires 10 minutes on this machine.
The company is considering launching a new product that would have a variable cost of $191.00 per unit and no avoidable fixed costs.It would require 4 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$191.00
B)$199.00
C)$193.00
D)$201.40

Question 50

The management of Radke Corporation has provided the following data concerning its two products--F74 and E50: The constrained resource is a particular machine that is available for 10,200 minutes each month.Each unit of product F74 requires 7 minutes on this machine.Each unit of product E50 requires 16 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$70,472
B)$52,088
C)$54,272
D)$49,592

Question 51

The management of Schacher Corporation has provided the following data concerning its two products: The constrained resource is a particular machine that is available for 10,300 minutes each month.
How many units of product J35V should be produced each month?

A)240
B)0
C)957
D)510

Question 52

Fontana Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 9,800 minutes each month.Each unit of product S83E requires 16 minutes on this machine and each unit of product G29P requires 5 minutes on this machine.
How many units of product S83E should be produced each month?

A)923
B)0
C)460
D)150

Question 53

The management of Schacher Corporation has provided the following data concerning its two products: The constrained resource is a particular machine that is available for 10,300 minutes each month.
What is the maximum contribution margin the company can earn per month?

A)$91,820
B)$99,920
C)$133,940
D)$96,138

Question 54

The same constrained resource is used by four different products at Porraz Corporation.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
If salespersons are paid commissions that are a set percentage of sales,which product would they prefer to sell? In other words,if it is a choice between selling one unit of one product and one unit of another,which product would they prefer to sell?

A)Y400
B)Y200
C)Y100
D)Y300

Question 55

Demeester Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 9,900 minutes each month.Each unit of product Y56G requires 10 minutes on this machine and each unit of product K46X requires 3 minutes on this machine.
The company is considering launching a new product that would have a variable cost of $79.00 per unit.It would require 14 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$79.00
B)$118.20
C)$80.80
D)$104.20

Question 56

The management of Radke Corporation has provided the following data concerning its two products--F74 and E50: The constrained resource is a particular machine that is available for 10,200 minutes each month.Each unit of product F74 requires 7 minutes on this machine.Each unit of product E50 requires 16 minutes on this machine.
The company is considering launching a new product that would have a variable cost of $90.00 per unit.It would require 16 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A)$90.00
B)$162.00
C)$94.50
D)$182.80

Question 57

Mcbee Products Inc.makes two products--C38S and V81Z.Product C38S's selling price is $91.00 and its unit variable cost is $72.80.Product V81Z's selling price is $200.00 and its unit variable cost is $180.00.The monthly demand is 890 units for product C38S and 680 units for V81Z.The constrained resource is a particular machine that is available for 10,000 minutes each month.Each unit of product C38S requires 7 minutes on this machine and each unit of product V81Z requires 10 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$21,920
B)$29,798
C)$23,738
D)$22,869

Question 58

Florez Corporation's two products have the following characteristics: The constrained resource is a particular machine that is available for 10,000 minutes each month.Each unit of product U98W requires 19 minutes on this machine and each unit of product M01S requires 7 minutes on this machine.
What is the maximum contribution margin the company can earn per month?

A)$22,822
B)$31,928
C)$23,948
D)$21,554

Question 59

Kuchler Corporation has four products that use the same constrained resource.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
If salespersons are paid commissions that are a set percentage of sales,which product would they prefer to sell? In other words,if it is a choice between selling one unit of one product and one unit of another,which product would they prefer to sell?

A)U300
B)U200
C)U100
D)U400

Question 60

Lilienthal Products Inc.makes two products--M38O and E34G.Product M38O's selling price is $145.00 and its unit variable cost is $87.00.Product E34G's selling price is $300.00 and its unit variable cost is $210.00.The monthly demand is 1,590 units for product M38O and 640 units for E34G.The constrained resource is a particular machine that is available for 10,100 minutes each month.Each unit of product M38O requires 5 minutes on this machine and each unit of product E34G requires 10 minutes on this machine.
How many units of product E34G should be produced each month?

A)0
B)1,435
C)640
D)215

Question 61

Attleson Corporation has designed a new product,R94,whose variable cost is $122.90 per unit and that requires 6.70 minutes of the constrained resource.The opportunity cost is $58.00 per minute used of the constrained resource.
Required:
What advice would you give to the company concerning the price that should be charged for the new product R94?

Question 62

The same constrained resource is used by four different products at Porraz Corporation.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

A)Y200
B)Y300
C)Y100
D)Y400

Question 63

Podkowka Corporation has two products that use the same constrained resource--a critical raw material. The total amount of the constrained resource available is 10,400 grams.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?
d.The company is considering launching a new product whose variable cost is $112 and that requires 10 grams of the constrained resource.What is the minimum selling price for the new product?

Question 64

Foshie Corporation is about to launch a new product,H16,whose variable cost is $104.30 per unit and that would require 6.00 centiliters of a key raw material that is the company's constrained resource.The opportunity cost of this raw material is $54.00 per centiliter used.
Required:
What advice would you give to the company concerning the price that should be charged for the new product H16?

Question 65

The management of Trachte Corporation is reviewing its policies concerning compensation of salespersons.The company has four products that use the same constrained resource.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
Required:
a.If salespersons are paid commissions that are a set percentage of sales,which product would they prefer to sell? In other words,if it is a choice between selling one unit of one product and one unit of another,which product would they prefer to sell?
b.From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

Question 66

Llano Corporation has four products that use the same constrained resource.Data concerning those products appear below: The company does not have enough of the constrained resource to satisfy for demand of all four products.
Required:
a.If salespersons are paid commissions that are a set percentage of sales,which product would they prefer to sell? In other words,if it is a choice between selling one unit of one product and one unit of another,which product would they prefer to sell?
b.From the standpoint of the entire company,if it is a choice between sales of one unit of one product versus another,which product should the salespersons emphasize?

Question 67

Sabat Corporation has two products--S94 and T88--that use the same constrained resource--a critical raw material.Data concerning those products follow: The total amount of the constrained resource available is 10,400 grams.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?

Question 68

Righter Corporation is considering six jobs for the upcoming period.Those jobs are listed below,along with relevant data. The total amount of the constrained resource that is available during the upcoming period is 66 hours.
Required:
a.Determine which jobs should be accepted for the upcoming period.
b.Determine the total incremental profit for the upcoming period if your plan from part (a) above is adopted.

Question 69

The constraint at Angstadt Inc.is a key raw material.A total of 9,700 ounces of this constrained resource are available.Data concerning the company's two products,B03 and P22,appear below: Each unit of product B03 requires 6 ounces of the constrained raw material;each unit of product P22 requires 2 ounces.
Required:
a.In the present circumstances,which product is most profitable?
b.How much of each product should be produced?
c.The company is considering launching a new product whose variable cost is $158 and that requires 14 ounces of the constrained resource.What is the minimum acceptable selling price for the new product?

Question 70

Schlaefer LLC is a consulting firm that is considering six projects for the upcoming period.The six projects under consideration are listed below,along with relevant data. The managing partner's time is the constraint in the firm.Only 113 hours of this constrained resource are available during the upcoming period.
Required:
a.Determine which projects should be accepted for the upcoming period.
b.Determine the total incremental profit for the upcoming period if your plan from part (a) above is adopted.

Question 71

Leeth Corporation is considering the following six long-term projects: Only $50,100 is available for investment in these projects.
Required:
a.Determine which projects should be accepted.
b.Determine the total net present value of all of the accepted projects if your plan from part (a) above is adopted.

Question 72

The constrained resource at Schiller Corporation is a key raw material.A total of 9,900 ounces of the constrained resource are available.Data concerning the company's two products follow: Product F57 requires 15 ounces of the constrained resource;product I66 requires 5 ounces.
Required:
a.Which product is most profitable,given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b) above is followed?