Outdoor Luggage, Inc., makes high-end hard-sided luggage forsports equipment. Data concerning three of the companyâs mostpopular models appear below. Ski Guard Golf Guard Fishing GuardSelling price per unit $ 210 $ 310 $ 265 Variable cost per unit $70 $ 150 $ 130 Plastic injection molding machine processing timerequired to produce one unit 8 minutes 10 minutes 10 minutes Poundsof plastic pellets per unit 7 pounds 16 pounds 6 pounds Required:1. If we assume that the total time available on the plasticinjection molding machine is the constraint in the productionprocess, how much contribution margin per minute of the constrainedresource is earned by each product? 2. Which product offers themost profitable use of the plastic injection molding machine? 3. Ifwe assume that a severe shortage of plastic pellets has requiredthe company to cut back its production so much that its newconstraint has become the total available pounds of plasticpellets, how much contribution margin per pound of the constrainedresource is earned by each product? 4. Which product offers themost profitable use of the plastic pellets? 5. Which product hasthe largest contribution margin per unit?
Outdoor Luggage, Inc., makes high-end hard-sided luggage forsports equipment. Data concerning three of the companyâs mostpopular models appear below. Ski Guard Golf Guard Fishing GuardSelling price per unit $ 210 $ 310 $ 265 Variable cost per unit $70 $ 150 $ 130 Plastic injection molding machine processing timerequired to produce one unit 8 minutes 10 minutes 10 minutes Poundsof plastic pellets per unit 7 pounds 16 pounds 6 pounds Required:1. If we assume that the total time available on the plasticinjection molding machine is the constraint in the productionprocess, how much contribution margin per minute of the constrainedresource is earned by each product? 2. Which product offers themost profitable use of the plastic injection molding machine? 3. Ifwe assume that a severe shortage of plastic pellets has requiredthe company to cut back its production so much that its newconstraint has become the total available pounds of plasticpellets, how much contribution margin per pound of the constrainedresource is earned by each product? 4. Which product offers themost profitable use of the plastic pellets? 5. Which product hasthe largest contribution margin per unit?
Related questions
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the companyâs most popular models appear below.
| Ski Guard | Golf Guard | Fishing Guard | ||||||||||
| Selling price per unit | $ | 300 | $ | 380 | $ | 225 | ||||||
| Variable cost per unit | $ | 160 | $ | 170 | $ | 75 | ||||||
| Plastic injection molding machine processing time required to produce one unit | 7 minutes | 6 minutes | 4 minutes | |||||||||
| Pounds of plastic pellets per unit | 11 pounds | 13 pounds | 6 pounds | |||||||||
1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.)
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2. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.)
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Outdoor Luggage Inc. makes high-end hard-sided luggage forsports equipment. Data concerning three of the companyâs mostpopular models appear below. |
| Ski Guard | Golf Guard | Fishing Guard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sellingprice per unit | $220 | $380 | $225 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable cost perunit | $100 | $110 | $115 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plastic injectionmolding machine processing time required to produce one unit | 5 minutes | 9 minutes | 8 minutes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pounds of plasticpellets per unit | 14 pounds | 8 pounds | 6 pounds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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