Question
Liebers, 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
Liebers, 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 | |
Sales Demand (units) | 6,000 | 5,000 | 3,000 |
Selling price per unit | $200 | $300 | $255 |
Variable cost per unit | $60 | $140 | $55 |
Pounds of plastic pellets per unit | 8 | 4 | 8 |
a. What is the contribution margin per unit for each product?
b. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is
c. How many units of each product should be produced if the company can only acquire 50,000 pounds of pellets?
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