Brett Products, located in Buffalo, New York, produces two lines of electric toothbrushes: Deluxe and Standard. Because Brett can sell all of the toothbrushes it produces, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data:
___________________________________________________________Per Unit
_____________________________________Deluxe Toothbrush Standard Toothbrush
Sale price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . $92......................$45
Variable expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...23........................18
Contribution margin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..$69.....................$27
Contribution margin ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 75%...........................60%
After expansion, the factory will have a production capacity of 4,700 machine hours per month. The plant can manufacture either 56 Standard electric toothbrushes or 25 Deluxe electric toothbrushes per machine hour.
Requirements
1. Identify the constraining factor for Brett.
2. Prepare an analysis to show which product line to emphasize.