Question
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the companys most popular models appear below. 1. If we assume
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the companys most popular models appear below.
1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product?
2. Which product offers the most profitable use of the plastic injection molding machine?
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?
4. Which product offers the most profitable use of the plastic pellets?
5. Which product has the largest contribution margin per unit?
Ski Guard 220 $ 140 $ Golf Guard 330 $ 260 $ AA 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 Fishing Guard 200 115 9 minutes 4 minutes 12 minutes 12 pounds 15 pounds 13 pounds
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