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Container Solutions produces plastic storage bins for household storage needs ( i ) ( Click the icon to view additional information. ) Sales prices and
Container Solutions produces plastic storage bins for household storage needs
iClick the icon to view additional information.
Sales prices and variable costs are as follows:
Click the icon to view the costs.
Read the requirements.
Requirement Which product should Container Solutions emphasize? Why?
Complete the product mix analysis to determine the contribution margin per machine hour.
Container Solutions
Product Mix Analysis
tableRegular,,Sales price per unit,,,Variable cost per unit,,,Contribution margin per unit,,,Units per machine hour,,,Contribution margin per machine hour,,,
More info
The company makes two sizes of bins: large gallon and regular gallon Demand for the products is so high that Container Solutions can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for hours per period. Container Solutions can produce large bins every hour, whereas it can produce regular bins in the same amount of time. Fixed costs amount to $ per period
Requirements
Which product should Container Solutions emphasize? Why?
To maximize profits, how many of each size bin should Container Solutions produce?
Given this product mix, what will the company's operating income be
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