After expansion, the factory will have a production capacity of 4,700 machine hours per month. The plant can manufacture either 50 standard electric toothbrushes or 25

deluxe electric toothbrushes per machine hour.

Requirement 1. Identify the constraining factor for Brik. Brik's constraint is

direct materials

labor hours

machine hours

.

Requirement 2. Prepare a product mix analysis to show which product line to emphasize.

		Deluxe	Standard
		Toothbrushes	Toothbrushes
Contribution margin per

Decision:

Emphasize the Brik standard electric toothbrush

Emphasize the Brik deluxe electric toothbrush

Per Unit

Deluxe Toothbrush

Standard Toothbrush

Sales price

$86

$52

Variable costs

24

18

Contribution margin

$62

$34

Contribution margin ratio

72.1%

65.4%