The Constrained Resource at Nealen Corporation Is a Key Raw

question 67

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: $$\begin{array} { l r r } & \text { B08 } & \text { O05 } \\\text { Demand (units) ....... } & 1,040 & 1,550 \\\text { Selling price .......... } & \$ 102.00 & \$ 124.00 \\\text { Variable cost ......... } & \$ 61.20 & \$ 86.80\end{array}$$ 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?