Exercise 10-5 Utilizing a Constrained Resource [LO10-5]

Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the companys most popular models appear below.

	Ski Guard			Golf Guard			Fishing Guard
Selling price per unit		$220			$380			$225
Variable cost per unit		$100			$110			$115
Plastic injection molding machine processing time required to produce one unit		5 minutes			9 minutes			8 minutes
Pounds of plastic pellets per unit		14 pounds			8 pounds			6 pounds

1a.	The total time available on the plastic injection molding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)

1b.	A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)