ContainAll produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product used to be so high that the company could sell as many of each slze as it could produce. The same machinery is used to produce both slzes. The machinery is avallable for only 2,800 hours per period. The company can produce 12 Large bins every hour compared to 20 Regular bins in the same amount of time. Fixed expenses amount to $100,000 per period. Product mix data follows: eici k the icon to view the product mixa alss Click the iconto view he operating nomefrom the optimal product mix Assume that demand for Regularbins is lmited to 31,500 unlts and demand for Large bins Is limlted to 23,000 units. 1. How many of each size bin should the company make now? 2. Given this product mix, what will be the company's operating income? 3. Explain why the operating Income is less than it was when the company was producing its optimal product mlx 1. How many of each size bin should the company make now? This is a product mix decision. First determine which bin size ContainAll should emphasize. ContainAll should emphasize the production of Vsize bins since they are the | size bins. ContainAIl ContainAIl Product Mix Analysis Operating Income from Optimal Product Mix Regular Large 56,000 $5.20 $ 291,200 100,000 $ 191,200 Number of bins per period Contribution margin per bin Total contribution margin Less: Fixed expenses Operating income 8.20$ 0.80 4.40 6.40 12 76.80 Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour 3.00 5.20 20 104.00$