Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Outdoor Luggage 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

Outdoor Luggage 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
Selling price per unit $240 $310 $235
Variable cost per unit $80 $170 $55
Plastic injection molding machine processing time required to produce one unit 11 minutes 8 minutes 6 minutes
Pounds of plastic pellets per unit 9 pounds 6 pounds 15 pounds

Required:
1a.

The total time available on the plastic injection molding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard?

1b. Which product would be the most profitable use of this constraint?
Fishing Guard
Ski Guard
Golf Guard

1c. Which product would be the least profitable use of this constraint?
Fishing Guard
Ski Guard
Golf Guard

2a.

A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard?

2b. Which product would be the most profitable use of this constraint?
Golf Guard
Fishing Guard
Ski Guard

2c. Which product would be the least profitable use of this constraint?
Golf Guard
Fishing Guard
Ski Guard

3. Which product has the largest unit contribution margin?
Fishing Guard
Golf Guard
Ski Guard

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: George H. Bodnar, William S. Hopwood

8th Edition

0130861774, 9780130861771

More Books

Students also viewed these Accounting questions