Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins Large (50 gallon) and Regular (35 galloni. Demand for the machinery is used to produce both sizes. The machinery in available for only 3,000 hours per period. The company can produce 10 Large bins every hour compared to 15 Regular (Click the icon to view the product mix analysis.) Click the icon to view the operating income from the optimal product mix) Assume that demand for Regular bins is limited to 36,000 units and demand for Large bins is limited to 25.000 units 1. How many of each size bin should the company make now? 2. Given this product mix, what will be the company's operating income? 3. Explain why the operating income is less than it was when the company was producing its optimal product moe Reference 1. How many of each size bin should the company make now? This is a product ma decision. First determine which bin size Storage Solutions should emphasize Storage Solutions should emphasize the production of regular size bins since they are more profitable than the large Decision Storage Solutions should produce regular size bins and large size bins Reference size bins Stor Produ Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour Storage Solutions Operating Income from Optimal Product Mix Number of bins per period 45,000 Contribution margin per bin 4.60 Total contribution margin $ 207.000 Less: Fixed expenses 110.000 $97.000 Operating income Prin Enter any number in the edit fields and then click Check An Print Done parts ods. The company makes two sizes of bins Large (50 gallon) and Regular (38 on Demand for the product used to be so high that the company could many other top Theme nly 3,000 hours per period. The company can produce 10 Large bin every hour compared to 15 Redarbine in the same amount of time. Fredspensers amount to $110,000 per Product del to view the operating income from the optimal product m.) und for Large bina is limited to 25,000 unts 7 any was producing is optimal product mix Reference utions should emphasize since they are more profitable than the large sebins ms and Large size bis Storage Solutions Product Mix Analysis Regular 5 8.10 3.50 Reference Large 5 1050 420 Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour 6.30 4.60 15 10 5 09.00 $ 63.00 Contribution margin per machine hour Storage Solutions Operating Income from Optimal Product Mix ber of bins per period 45,000 4.60 bution margini per bin contribution margin $ 207,000 110.000 Fred expenses $97.000 rating income Print Done Print Dono Chic Art