StoreAll 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 products is so high that

StoreAll 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 3,300

hours per period. StoreAll can produce 10 large bins every hour, whereas it can produce 17 regular bins in the same amount of time. Fixed costs amount to $115,000 per period.

Regular Large

Sales price per unit $8.00 $10.40

Variable costs per unit 3.50 4.40

..

Sales prices and variable costs are as follows:

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(Click the icon to view the costs.)Read the requirements

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Requirement 1. Which product should

StoreAll

emphasize? Why?

Complete the product mix analysis to determine the contribution margin per machine hour.

StoreAll
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