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Contain-It Company produces plastic storage bins for household storage needs. View the additional information. Sales prices and variable costs are as follows: View the
Contain-It Company produces plastic storage bins for household storage needs. View the additional information. Sales prices and variable costs are as follows: View the sales prices and variable costs. Read the requirements. Requirement 1. Which product should Contain - It Company emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. Contain-It Company Additional Information The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the products is so high that Contain - It Company 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 3,000 hours per period. Contain It Company can produce 11 large bins every hour, whereas it can produce 15 regular bins in the same amount of time. Fixed costs amount to $95,000 per period. - X Sales price per unit Variable cost per unit Contribution margin per unit Product Mix Analysis Regular Large Units per machine hour Contribution margin per machine hour Which product should Contain - It Company emphasize? Why? Contain - It Company should emphasize the production of because this product has the higher Requirement 2. To maximize profits, how many of each size bin should Contain - It Company produce? (Enter a 0 for any zero amounts.) Contain-It Company should spend machine hours making machine hours making large size bins. regular size bins, and Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period Contribution margin per regular size bin Print Done Sales Prices and Variable Costs Regular Large Sales price per unit $ Variable costs per unit 8.20 $ 3.20 10.10 4.40 Print Done
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