Question
Container Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon).
Container Solutions 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 is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 12 Large bins every hour compared to 15 Regular bins in the same amount of time. Fixed expenses amount to $110,000 per period. Sales prices and variable costs are as follows: (Click the icon to view the costs.) 1. Which product should Container Solutions emphasize? Why? 2. To maximize profits, how many of each size bin should the company produce? 3. Given this product mix, what will the company's operating income be? 2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.) Number of Regular bins Container Solutions should make Number of Large bins Container Solutions should make 49,500 $2 0 3. Given the product mix determined in the previous step, calculate Container Solutions's operating income for the period. Number of bins per period $2 Contribution margin per bin x Data table Total contribution margin Less: Fixed expenses Operating income Regular Large Sales price per unit $ 8.60 $ 10.30 Variable cost per unit $ 3.40 $ 4.00 Help me solve this Video Get more help Cancel
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