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Brent Products, located in Ann Arbor, Michigan, produces two lines of electric toothbrushes: Deluxe and Standard. Because Brent can sell all the toothbrushes it produces,
Brent Products, located in Ann Arbor, Michigan, produces two lines of electric toothbrushes: Deluxe and Standard. Because Brent 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: (Click the icon to view the data.) After expansion, the factory will have a production capacity of 4,900 machine hours per month. The plant can manufacture either 58 Standard electric toothbrushes or 28 Deluxe electric toothbrushes per machine hour. Requirements 1. Identify the constraining factor for Brent Products. 2. Prepare an analysis to show which product line to emphasize. Data Table - . Per Unit Deluxe Standard Toothbrush Toothbrush $ 88 $ 46 18 15 Sales price Variable expenses Contribution margin Contribution margin ratio.. 70 $ 31 79.5% 67.4% Print Done Requirement 1. Identify the constraining factor for Brill. Brill's constraint is machine hours Requirement 2. Prepare an analysis to show which product line to emphasize. Brill Products Product Mix Analysis Deluxe Standard Contribution margin per unit 75 24 Multiply by: Units produced each hour $ 25 $ 55 Contribution margin per machine hour 1,875 $ 1,320 Multiply by: Capacity-Number of machine hours 4,300 4,300 Total contribution margin at capacity 8,062,500 $ 5,676,000 $ Decision: Emphasize the Brill Deluxe electric toohbrushes
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