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Requirement 1. Which product should Storage Solutions emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. - Data table
Requirement 1. Which product should Storage Solutions emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. - Data table More info Storage Solutions Product Mix Analysis Regular Large 10.40 Regular Large S 8.80 $ Sales price per unit Variable costs per unit The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the products is so high that Storage Solutions can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for 3,000 hours per period. Storage Solutions can produce 11 large bins every hour, whereas it can produce 16 regular bins in the same amount of time. Fixed costs amount to $85,000 per period. Sales price per unit 3.50 4.60 Variable cost per unit Contribution margin per unit Units per machine hour Print Done Contribution margin per machine hour Print Done Which product should Storage Solutions emphasize? Why? Storage Solutions should emphasize the production of because this product has the higher Requirement 2. To maximize profits, how many of each size bin should Storage Solutions produce? (Enter a "O" for any zero amounts.) Storage Solutions should spend machine hours making regular size bins, and machine hours making large size bins. Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period X Contribution margin per regular size bin Total contribution margin LUU Fixed costs Operating income
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