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Containers Plus produces plastic storage bins for household storage needs (Click the icon to view additional information.) Sales prices and variable costs are as follows
Containers Plus produces plastic storage bins for household storage needs (Click the icon to view additional information.) Sales prices and variable costs are as follows EEB (Click the icon to view the costs.) The company makes two sizes of bins: large (50 gallon) and regular (35 gallon) Read the requirement Demand for the products is so high that Containers Plus 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 3,100 hours per period. Containers Plus can produce 11 large bins every hour, whereas it can produce 16 regular bins in the same amount of time. Fixed costs amount to $125,000 per period Costs Regular Large Sales price per unit Variable costs per unit $ 8.20 $ 10.10 3.00 4.20 Requirement 1. Which product should Containers Plus emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour Containers Plus Product Mix Analysis Regular Large Sales price per unit Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour Which product should Containers Plus emphasize? Why? Containers Plus should emphasize the production of Requirement 2. To maximize profits, how many of each size bin should Containers Plus produce? (Enter a"O" for any zero amounts.) Containers Plus should spend machine hours making Requirement 3. Given this product mix, what will the company's operating income be? Number of regular Contribution margin per regular size bin Total contribution margin Fixed costs Operating income Vbecause this product has the higher machine hours making regular size bins, and large size bins size bins per peri od
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