Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the companys most popular models appear below-:

_________________Product_____________________

Ski Guard Golf Guard Fishing Guard

Selling price per unit $200 $300 $255

Variable Costs per unit 60 140 55

Plastic injection molding machine processing

Time required to produce one unit 2 minutes 5 minutes 4 minutes

Pounds of plastic pellets per unit 7 pounds 4 pounds 8 pounds

Required:

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? (6 points)

2. Which product offers the most profitable use of the plastic injection molding machine? (1 points)

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? (6 points)

4. Which product offers the most profitable use of the plastic pellets? (1 point)

5. Which product has the largest contribution margin per unit? Why wouldnt this product be the most profitable use of the constrained resource in either case? (2 points)