Brett, located in Rochester, New York, produces two lines of electric toothbrushes: deluxe and standard. Because Brett can sell all the toothbrushes it can produce, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data:

After expansion, the factory will have a production capacity of 4,100 machine hours per month. The plant can manufacture either 55 standard electric toothbrushes or 23 deluxe electric toothbrushes per machine hour.

Requirements

1. Identify the constraining factor for Brett.

2. Prepare an analysis to show which product line the company should emphasize.

Sale price Variable expenses Contribution margin Contribution margin ratio Deluxe Standard Toothbrush Toothbrush $ Per Unit $ 80 $ 24 56 $ 70.0% 52 16 36 69.2%