Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Domand for the pro size as lt could produce. The same machinery ls used to produCe Doth size The mach ilable for only 3 000 t the company could sell as many o hinery is avail ours per time. Fixed expenses amount to $110,000 per period. Product mix d produce 10 Large bins every hour compared to 15 Regular bins in the same amount of mix da ws E(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 mix. 1. How many of each size bin should the company make now? This is product mix decision. First determine which bin size Storage Solutions should emphasize. size bins. Vthe Storage Solutions should emphasize the production of size bins since they are Storage Solutions Product Mix Analysis Regular Large Sales price per unit 8.10 10.50 3.50 4.20 Less: Variable cost per unit Contribution margin per unit 4.60 6.30 15 X Units per machine hour X 69.00 63.00 Contribution margin per machine hour 3 10 Storage Solutions Operating Income from Optimal Product Mix Number of bins per period 45,000 $ 4.60 Contribution margin per bin $ 207,000 otal contribution margin 110,000 Less: Fixed expenses $ 97,000 Operating income