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Green Bay Bike Co. manufactures and sells three different types of bikes. They are Classic, Sport, and Luxury lines. Custom paint and polish time is
Green Bay Bike Co. manufactures and sells three different types of bikes. They are Classic, Sport, and Luxury lines. Custom paint and polish time is limited. More time is required to paint and polish the Sport and Luxury lines than the Classic line. Additional 'per-unit' information is provided below. Product Classic Sport Luxury 75.00 100.00 Selling price 50.00 Variable costs and 63.00 78.00 expenses 40.00 Contribution margin 12.00 22.00 10.00 Fixed costs 5.00 5.00 5.00 Total costs 45.00 Grinding and polishing time 1.00 1.50 required (hrs) 68.00 4.00 83.00 QUESTION: What is the contribution margin per unit of limited resource for each type of bike? Classic Sport Luxury QUESTION: Given the facts and answers from 26 above, if additional grinding and polishing time could be obtained, the additional capacity should be used to produce which product line? Classic Sport Luxury
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