Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of...

Transcribed Image Text:

Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 11 Large bins every hour compared to 15 Regular bins in the same amount of time. Fixed expenses amount to $110,000 per period. Sales prices and variable costs are as follows Storage Solutions Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour Product Mix Analysis Regular Large Contribution margin per machine hour Decision: Storage Solutions should emphasize the production of because the is higher 2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.) Number of Regular bins Storage Solutions should make Number of Large bins Storage Solutions should make 3. Given the product mix determined in the previous step, calculate Storage Solutions's operating income for the period Number of bins per period Contribution margin per bin Total contribution margin Less: Fixed expenses Operating income: Data table. Sales price per unit...... Variable cost per unit.... $ 8.00 $ 10.30 $ 3.50 $ 4.00 Print Done Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 11 Large bins every hour compared to 15 Regular bins in the same amount of time. Fixed expenses amount to $110,000 per period. Sales prices and variable costs are as follows Storage Solutions Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour Product Mix Analysis Regular Large Contribution margin per machine hour Decision: Storage Solutions should emphasize the production of because the is higher 2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.) Number of Regular bins Storage Solutions should make Number of Large bins Storage Solutions should make 3. Given the product mix determined in the previous step, calculate Storage Solutions's operating income for the period Number of bins per period Contribution margin per bin Total contribution margin Less: Fixed expenses Operating income: Data table. Sales price per unit...... Variable cost per unit.... $ 8.00 $ 10.30 $ 3.50 $ 4.00 Print Done