The Constrained Resource at Nealen Corporation Is a Key Raw

question 36

Essay

The constrained resource at Nealen Corporation is a key raw material.A total of 9, 800 ounces of the constrained resource are available.Data concerning the company's two products, B08 and O05, follow: Product B08 requires 6 ounces of the constrained resource;product O05 requires 4 ounces.
Required:
a.Which product is most profitable, given the company's constraint?
b.How much of each product should be produced?
c.What is the total contribution margin if your plan in part (b)above is followed?

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Definitions:

Journal

A daily record of financial transactions, providing a detailed account of all entries for each transaction.

Chart of Accounts

An organized list of all ledger account titles and numbers used by a company, serving as a framework for the recording of financial transactions.

Asset Accounts

Accounts that track the value of the resources owned by a business, which can include cash, inventory, equipment, and real estate.