Question
Blue Spruce Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features,
Blue Spruce Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Blue Spruce is currently operating at full capacity with limited machine time. Sales and production information relevant to each model is as follows:
Product | ||||||
---|---|---|---|---|---|---|
Economy | Standard | Deluxe | ||||
Selling price | $26.00 | $51.90 | $88.80 | |||
Variable costs and expenses | $11.00 | $17.50 | $40.00 | |||
Machine hours required | 0.50 | 0.80 | 1.60 |
Ignoring the machine time constraint, which single product should Blue Spruce Industries produce?
Blue Spruce Industries should produce select a product Economy modelStandard modelDeluxe model. |
What is the contribution margin per unit of limited resource for each product? (Round answers to 2 decimal places, e.g. 15.75.)
Model | Contribution Margin | ||
---|---|---|---|
Economy | $enter a dollar amount per machine hour | per machine hour | |
Standard | $enter a dollar amount per machine hour | per machine hour | |
Deluxe | $enter a dollar amount per machine hour | per machine hour |
If it could obtain additional machine time, how should the company use the additional time?
Additional machine time should be used to produce the select a product Deluxe modelStandard modelEconomy model. |
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