Question
Blanks Products, located in Atlanta comma Georgia, produces two lines of electric toothbrushes: Deluxe and Standard. Because Blank can sell all the toothbrushes it produces,
Blanks Products, located in Atlanta comma Georgia, produces two lines of electric toothbrushes: Deluxe and Standard. Because Blank can sell all 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
Standard
Toothbrush
Toothbrush
Sales price. . . . . . . . . . . . . . . . . . . .
$84
$45
Variable expenses. . . . . . . . . . . . . . . . .
22
16
Contribution margin. . . . . . . . . . . . . .
$62
$29
Contribution margin ratio. . . . . . . . . .
73.8%
64.4%
After expansion, the factory will have a production capacity of 4 comma 200 machine hours per month. The plant can manufacture either 68 Standard electric toothbrushes or 26 Deluxe electric toothbrushes per machine hour. Requirements 1. Identify the constraining factor for Blank Products. 2. Prepare an analysis to show which product line to emphasize.
Requirement 1. Identify the constraining factor for Blanks constraint is direct materials labor hours machine hours .
Requirement 2. Prepare an analysis to show which product line to emphasize. Blanks Products Product Mix Analysis Deluxe Standard
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