The Constraint at Johngrass Corporation Is Time on a Particular

question 144

Multiple Choice

The constraint at Johngrass Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below: Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

• A)$11.60 per minute
• B)$14.10 per minute
• C)$91.64 per unit
• D)$22.24 per unit

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Definitions:

Two Proprietorships

Two separate businesses or commercial ventures, each owned by a single individual.

Fair Value

An assessment of an asset or liability's market worth, determined by current market rates or appraisals.

Noncash Assets

Assets that are not in the form of cash but can be converted into cash, such as investments, real estate, and inventory.

Book Value

The net value of an asset, calculated as the asset’s original cost minus depreciation, amortization, or impairment costs.