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The Constraint at Mirsch Inc

question 7

Essay

The constraint at Mirsch Inc.is a key raw material.A total of 9, 600 ounces of this constrained resource are available.Data concerning the company's two products, B01 and P46, appear below: The constraint at Mirsch Inc.is a key raw material.A total of 9, 600 ounces of this constrained resource are available.Data concerning the company's two products, B01 and P46, appear below:   Each unit of product B01 requires 9 ounces of the constrained raw material;each unit of product P46 requires 12 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 $210 and that requires 9 ounces of the constrained resource.What is the minimum acceptable selling price for the new product? Each unit of product B01 requires 9 ounces of the constrained raw material;each unit of product P46 requires 12 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 $210 and that requires 9 ounces of the constrained resource.What is the minimum acceptable selling price for the new product?

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Definitions:

Copying Charges

Fees associated with reproducing documents, images, or other materials, typically using a photocopier or printer.

Job Order Cost System

An accounting method used to assign product costs based on specific job orders, tracking expenses for materials, labor, and overhead per job.

Process Cost System

An accounting methodology used to allocate costs to products or services based on the processes they go through.

Finished Goods Inventory

The total value of manufactured products that are completed and ready for sale.

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