The Constraint at Mirsch Inc Each Unit of Product B01 Requires 9 Ounces of the a Total

The constraint at Mirsch Inc. is a key raw material. A total of 9,600 ounces of this constrained resource are available. Data concerning the company's two products, B01 and P46, appear below: $\begin{array}{rr}&B 01 & \mathrm{P} 46 \\\text { Demand (units) }&660 & 570 \\\text { Selling price }&\$ 261.00 & \$ 276.00 \\\text { Variable cost }&\$ 234.90 & \$ 248.40\end{array}$ Each unit of product B01 requires 9 ounces of the constrained raw material; each unit of product P46 requires 12 ounces.
Required:
a. In the present circumstances, which product is most profitable?
b. How much of each product should be produced?
c. The company is considering launching a new product whose variable cost is $210 and that requires 9 ounces of the constrained resource. What is the minimum acceptable selling price for the new product?

Correct Answer:

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a. Computation of the profitability ind...

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