Tillison Corporation Makes Three Products That Use the Current Constraint

question 42

Multiple Choice

Tillison Corporation makes three products that use the current constraint which is a particular type of machine.Data concerning those products appear below: Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product.Up to how much should the company be willing to pay to acquire more of the constrained resource?

• A)$10.80 per minute
• B)$69.44 per unit
• C)$16.40 per minute
• D)$14.04 per unit

---

Definitions:

FIFO Method

Accounting approach where the first goods purchased or produced are the first ones removed from inventory and reported as cost of goods sold.

Cost Reconciliation

The process of checking and ensuring that the accounting records regarding costs correspond with the actual expenses incurred.

Units Transferred

The quantity of items moved from one stage of production to another, or from the production department to finished goods inventory.

FIFO Method

An inventory valuation method where it is assumed that the first items placed in inventory are the first sold, standing for "First-In, First-Out."