Musial Corporation Has Four Products That Use the Same Constrained

question 11

Essay

Musial Corporation has four products that use the same constrained resource. Data concerning those products appear below: $\begin{array}{lrrrr}&\mathrm{J} 100 & \mathrm{~J} 200 & \mathrm{~J} 300 & \mathrm{~J} 400 \\\text {Unit selling price }&\$ 33.40 & \$ 25.80 & \$ 12.10 & \$ 49.00 \\\text {Unit variable cost }&\$ 14.70 & \$ 7.70 & \$ 2.80 & \$ 29.40 \\\text {Amount of the constrained resource required. }&0.48 & 0.30 & 0.21 & 0.54\end{array}$ The company does not have enough of the constrained resource to satisfy for demand of all four products.
Required:
a. 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?
b. From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?

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Definitions:

Total Assets

Total assets represent the sum of all resources owned by a company, valued in monetary terms, and listed on its balance sheet, including both current and non-current assets.

Liabilities

Financial obligations that a company owes to outside parties, including loans, accounts payable, mortgages, and other debts.

Retained Earnings

The portion of a company's profits that is saved or retained rather than distributed to shareholders as dividends.

Balance Sheet

An overview report capturing a business's financial condition, specifying its holdings, liabilities, and shareholder equity at a specific instant.