Whitacre Products Inc

question 69

Multiple Choice

Whitacre Products Inc. makes two products—P32W and I90J. Product P32W's selling price is $44.00 and its unit variable cost is $26.40. Product I90J's selling price is $220.00 and its unit variable cost is $198.00. The monthly demand is 3,500 units for product P32W and 760 units for I90J. The constrained resource is a particular machine that is available for 9,800 minutes each month. Each unit of product P32W requires 2 minutes on this machine and each unit of product I90J requires 10 minutes on this machine.
-Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?

• A)$22.00 per minute
• B)$2.20 per minute
• C)$17.60 per minute
• D)$8.80 per minute

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Definitions:

Petrograd

The name given to the city of Saint Petersburg, Russia, between 1914 and 1924, during a period of fervent patriotism and subsequent revolution.

New Economic Policy

A policy introduced by Lenin in the Soviet Union in 1921 to revitalize the economy by allowing some private enterprise.

Socialist Orthodoxy

Refers to the strict adherence to the original doctrines of socialism, often associated with Marxist-Leninist principles and practices.

Private Ownership

A system in which private individuals or companies own the means of production and distribution of goods and services, operating them for profit.