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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 | $280 | $330 | $175 | ||||||
| Variable cost per unit | $140 | $210 | $115 | ||||||
| Plastic injection molding machine processing time required to produce one unit | 4 minutes | 12 minutes | 9 minutes | ||||||
| Pounds of plastic pellets per unit | 12 pounds | 15 pounds | 13 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? (Round your answers to 2 decimal places.) |
| Ski Guard | Golf Guard | Fishing Guard | ||||
| Selling price per unit | $280 | $330 | $175 | |||
| Variable cost per unit | ||||||
| Contribution margin per unit | ||||||
| Plastic injection molding machine processing time required to produce one unit | minutes | minutes | minutes | |||
| Contribution margin per unit of the constrained resource | per minute | per minute | per minute | |||
| 1b. | Which product would be the most profitable use of this constraint? Ski Guard Fishing Guard Golf Guard
|
| 1c. | Which product would be the least profitable use of this constraint? |
| Ski Guard Fishing 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? (Round your answers to 2 decimal places.) |
| Ski Guard | Golf Guard | Fishing Guard | ||||
| Selling price per unit | ||||||
| Variable cost per unit | ||||||
| Contribution margin per unit | ||||||
| Pounds of plastic pellets required to produce one unit | pounds | pounds | pounds | |||
| Contribution margin per unit of the constrained resource | per pound | per pound | per pound | |||
| 2b. | Which product would be the most profitable use of this constraint? Ski Guard Fishing Guard Golf Guard
|
| 2c. | Which product would be the least profitable use of this constraint? Ski Guard Fishing Guard Golf Guard
|
| 2c. | Which product would be the least profitable use of this constraint? |
| Ski Guard Fishing Guard Golf Guard
|
3.Which product has the largest unit contribution margin?
Ski Guard
Fishing Guard
Golf Guard
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