The Same Constrained Resource Is Used by Four Different Products

question 45

Multiple Choice

The same constrained resource is used by four different products at Hinchcliffe 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)I100
• B)I200
• C)I300
• D)I400

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Definitions:

Warranty Expense

Costs associated with the commitment to repair or replace a product if it fails within a specified period.

Warranty Repairs

Services offered to repair or replace products free of charge that have been sold with a guarantee promising repair if necessary within a certain period.

Income Statement

A financial document summarizing a company's revenues, expenses, and profits over a specific period, typically a quarter or year.

Sales Units

The number of units of a product that have been sold during a specific period.