Question
Exercise 12-5 Volume Trade-Off Decisions [LO12-5] Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the companys most popular models
Exercise 12-5 Volume Trade-Off Decisions [LO12-5]
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 | $ | 240 | $ | 370 | $ | 225 | ||||||
| Variable cost per unit | $ | 100 | $ | 255 | $ | 105 | ||||||
| Plastic injection molding machine processing time required to produce one unit | 7 minutes | 5 minutes | 7 minutes | |||||||||
| Pounds of plastic pellets per unit | 15 pounds | 7 pounds | 10 pounds | |||||||||
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?
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Financial and Managerial Accounting
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
11th Edition
9780538480901, 9781111525774, 538480890, 538480904, 1111525773, 978-0538480895
