Homework: Module 5 Homework Assignment Save Score: 6.84 of 10 pts 2 of 5 (2 complete) HW Score: 25.91%, 16.84 of 65 pts S8-9 (similar to) 18 Question Help Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,100 hours per period. The company can produce 9 Large bins every hour compared to 16 Regular bins in the same amount of time. Fixed expenses amount to $95,000 per period. Sales prices and variable costs are as follows: (Click the icon to view the costs.) 1. Which product should Storage Solutions emphasize? Why? 2. To maximize profits, how many of each size bin should the company produce? 3. Given this product mix, what will the company's operating income be? 1 1. Which product should Storage Solutions emphasize? Why? Complete the product mix analysis to determine which product Storage Solutions should emphasize. Data Table Storage Solutions Product Mix Analysis Regular $ 8.00 3.30 Sales price per unit Variable cost per unit Large $ 10.60 4.50 Sales price per unit Less: Variable cost per unit Contribution margin per unit Regular Large $ 8.00 $ 10.60 $ 3.30 $ 4.50 4.70 6.10 Print Done 16 9 Units per machine hour $ 75.20 $ 54.90 Contribution margin per machine hour Decision: Storage Solutions should emphasize the production of Regular bins because the contribution margin per machine hour is higher. 2. To maximize profits, how many of each size bin should the company produce? (If there are zero machine hours allocated to a bin size, enter 0 in the input box.) 3,100 machine hours making Regular size bins and 0 machine hours making Storage Solutions should spend Large size bins. 3. Given the product mix determined in the previous step, calculate Storage Solutions's operating income for the period. Number of bins per period Contribution margin per bin Total contribution margin $ 4.70 Less: Fixed expenses 95,000 Operating income