Question

The constraint at Bonavita Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:

	UN				ZG				PW
Selling price per unit	$	303.36			$	512.74			$	533.05
Variable cost per unit	$	201.24			$	365.32			$	383.45
Minutes on the constraint		4.60				8.10				8.80

Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized.

UN,ZG,PW

PW,UN,ZG

UN,PW,ZG

ZG,PW,UN

Answer 1

	UN	ZG	PW
Selling price per unit	303.36	512.74	533.05
Variable cost per unit	201.24	365.32	383.45
Contribution margin per unit	102.12	147.42	149.6
Minutes on the constraint	4.60	8.10	8.80
Contribution margin per minute	102.12/4.60 = 22.2	147.42/8.10 = 18.2	149.6/8.80 = 17

Product	Rank
UN	1
ZG	2
PW	3

First option is the correct option

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