Garson, Inc

question 131

Essay

Garson, Inc. produces three products. Data concerning the selling prices and unit costs of the three products appear below:
Fixed costs are applied to the products on the basis of direct labor hours.
Demand for the three products exceeds the company's productive capacity. The milling machine is the constraint, with only 2,400 minutes of milling machine time available this week.
Required:
a. Given the milling machine constraint, which product should be emphasized? Support your answer with appropriate calculations.
b. Assuming that there is still unfilled demand for the product that the company should emphasize in part (a) above, up to how much should the company be willing to pay for an additional hour of milling machine time?

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Definitions:

Serratus Anterior

A muscle located on the side of the thorax that aids in the movement of the shoulder blade.

Plantar Flexion

A movement that occurs when the toes are pointed downward, decreasing the angle between the foot and the leg.

Eversion

The act of turning inside out or being turned inside out, often used in medical contexts to describe the movement of body parts.

Lateral Compartment

Refers to one of the compartments in the lower leg, containing muscles that are primarily responsible for eversion and plantarflexion of the foot.