QuestionHolden Corporation produces three products, with costs and selling prices as follows:
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline & \multicolumn{2}{|l|}{Product A} & \multicolumn{2}{|l|}{Product B} & \multicolumn{2}{|l|}{Product C} \\
\hline Selling price per unit & \$ 30 & 100\% & \$ 20 & 100\% & \$ 15 & 100\% \\
\hline Variable costs per unit & 18 & 60\% & 15 & 75\% & 6 & 40\% \\
\hline Contribution margin per unit & \$ 12 & 40\% & \$ 5 & 25\% & \$ 9 & 60\% \\
\hline
\end{tabular}
A particular machine is the bottleneck. On that machine, 3 machine hours are required to produce each unit of Product hour is required to produce each unit of Product B, and 2 hours are required to produce each unit of Product C. Rank the products from the most profitable to the least profitable use of the constrained resource (bottleneck).
Note: Round your intermediate calculations to 2 decimal places.
Studdy Solution
The ranking from most to least profitable use of the constrained resource is: Product B, Product C, and Product A.
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