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Please see attached documents for questions. Once finished please let me know Question 3 Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data
Please see attached documents for questions. Once finished please let me know
Question 3 Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. 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 Ski Guard $280 $140 Golf Guard $330 $210 Fishing Guard $175 $115 4 minutes 12 pounds 12 minutes 15 pounds 9 minutes 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? Selling price per unit Variable cost per unit Contribution margin per unit SkiGaurd ? ? ? Plastic injection molding machine processing time required to produce on unit ? Minutes Golf Gard ? ? ? ?Minutes Fishing guard ? ? ? ?Minutes Contribution margin per unit of the constrained resource. 1b. Which product would be the most profitable use of this constraint? Ski Guard Fishing Guard Gold gaurd 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? Selling price per unit Variable cost per unit Contribution margin per unit SkiGaurd ? ? ? Pounds of plastic pellets required to produce one unit?pounds 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 3. Which product has the largest unit contribution margin? Ski Guard Fishing Guard Golf Guard Question 4 Golf Gard ? ? ? Fishing guard ? ? ? ?pounds ?Pounds Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $92,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product A B C Quarterly Output 11,000 pounds 16,000 pounds 4,000 gallons Selling Price $ 5 per pound $ 6 per pound $ 15 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Product A B C Additional Processing Costs $ 39,000 $ 37,000 $ 9,000 Selling Price $ 7 per pound $ 10 per pound $ 19 per gallon Required: a. Compute the incremental profit (loss) for each product. Product A Product B Product C Selling price per after further processing ? ? ? Selling price at the split-off point ? ? ? ? ? ? ? ? ? Incremental revenue per pound or gallon Total quarterly output in pounds or gallons Total incremental revenue Total incremental processing costs Total incremental profit of loss b. Which product or products should be sold at the split-off point? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Product A Product B Product C c. Which product or products should be processed further? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Product A Product B Product C Question 5 Perit Industries has $120,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $120,000 $0 $21,000 $8,200 6 years Project B $0 $120,000 $30,000 $0 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 15%. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: a. Calculate net present value for each project. Which investment alternative (if either) would you recommend that the company accept? Project B Project AStep by Step Solution
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