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Cranston Corporation makes four products in a single facility. Data concerning these products appear below:...

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Question

Accounting

Cranston Corporation makes four products in a single facility. Data concerning these products appear below:

Products
A B C D
Selling price per unit $ 42.30 $ 50.00 $ 37.60 $ 33.50
Variable manufacturing cost per unit $ 20.80 $ 30.70 $ 21.00 $ 19.90
Variable selling cost per unit $ 2.70 $ 2.10 $ 1.00 $ 2.40
Milling machine minutes per unit 3.30 4.10 2.60 1.30
Monthly demand in units 1,000 4,000 3,000 3,000

The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines.

Up to how much should the company be willing to pay for one additional minute of milling machine time if the company has made the best use of the existing milling machine capacity?

Note: Round your intermediate calculations to 2 decimal places.

Multiple Choice

$4.20

$11.20

$18.80

$0.00

Answer & Explanation Solved by verified expert
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