Exercise 11-5 (Algo) Volume Trade-Off Decisions [LO11-5]
Exercise 11-5 (Algo) Volume Trade-Off Decisions (LO11-5] Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Guard $ 380 $ 160 Golf Guard $ 380 $ 170 Fishing Guard $ 225 $ 75 Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 7 minutes 11 pounds 6 minutes 13 pounds 4 minutes 6 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.) Ski Guard Golf Guard Fishing Guard Contribution margin per minute of the constrained resource per minute per minute per minute Complete this question by entering your answers in the tabs below. Required 1 Required 2. Required 3 Required 4 Required 5 Which product offers the most profitable use of the plastic injection molding machine? OFishing Guard Oski Guard O Golf Guard Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.) Ski Guard Golf Guard Fishing Guard per pound Contribution margin per pound of the constrained resource per pound per pound Required 1 Required 2 Required 3 Required 4 Required 5 Which product has the largest contribution margin per unit? Ski Guard Fishing Guard Golf Guard
