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Storage Solutions produces plastic storage bins for household storage needs. (Click the icon to view additional information.) Requirement 1. Which product should Storage Solutions emphasize?
Storage Solutions produces plastic storage bins for household storage needs. (Click the icon to view additional information.) Requirement 1. Which product should Storage Solutions emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. Storage Solutions Product Mix Analysis Regular Large Sales price per unit Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour Data table Sales price per unit Variable costs per unit Print More info 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 2,700 hours per period. Storage Solutions can produce 11 large bins every hour, whereas it can produce 17 regular bins in the same amount of time. Fixed costs amount to $125,000 per period. Print Done Requirements 1. Which product should Storage Solutions emphasize? Why? 2. To maximize profits, how many of each size bin should Storage Solutions produce? 3. Given this product mix, what will the company's operating income be? Print Done Regular Large $ 8.50 $ 3.40 Done - X - X 10.80 4.60
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