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Exercise 12-5 Utilizing a Constrained Resource [LO12-5] Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular
Exercise 12-5 Utilizing a Constrained Resource [LO12-5] Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Golf Guard Fishing Guard $310 $150 $275 $85 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 $330 $150 8 minutes 7 pounds 15 minutes 9pounds 5 minutes 10 pounds Required: a. The total time available on the plastic injection molding machine is the constraint in the production process. What is the contibution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? Selling price per unit Variable cost per unit margin per unit Plastic injection molding machine processing time required to produce one unit per per per minute margin per unit of the constrained resource b. Which product would be the most profitable use of this constraint? Fishing Guard Golf Guard Ski Guard 1c. Which product would be the least profitable use of this constraint? Fishing Guard Golf Guard Ski Guard 2a. 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? Selling price per unit Variable cost per unit Contribution Pounds of plastic pellets required to produce one unit margin per unit pounds pounds pounds margin per unit of the constrained resource per pound per pound per pound 2b. Which product would be the most profitable use of this constraint? Ski Guard O Fishing Guard Golf Guard 2c. Which product would be the least profitable use of this constraint? Ski Guard O Fishing Guard Golf Guard 3. Which product has the largest unit contribution margin? O Fishing Guard Ski Guard Golf Guard
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