The Constraint at Frayer Inc

question 39

Essay

The constraint at Frayer 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, Z78 and D87, appear below: Each unit of product Z78 requires 5 ounces of the constrained raw material; each unit of product D87 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 $157 and that requires 26 ounces of the constrained resource. What is the minimum acceptable selling price for the new product?

Determine operating leverage and its impact on profits.

Analyze profit-volume (PV) chart and its components.

Understand the concept of sales mix and its effect on company's profitability.

Identify and classify costs into fixed, variable, and mixed categories.

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Definitions:

Derived Class

A class that inherits behavior and attributes from another class, known as the base class.

Base Class

A class from which other classes are derived.

Instance Variables

Variables defined in a class for which each instantiated object of the class has its own copy.

Final Modifier

A keyword in Java indicating that a variable cannot be reassigned, a method cannot be overridden, or a class cannot be inherited.