Question
Zoom Corporation manufactures and sells three different types of binoculars. They are referred to as Good, Better, and Best binoculars. Grinding and polishing time is
Zoom Corporation manufactures and sells three different types of binoculars. They are referred to as Good, Better, and Best binoculars. Grinding and polishing time is limited. More time is required to grind and polish the lenses used in the Better and Best binoculars. Additional information is provided below.
Product
Good
Better
Best
Selling price$78.40$329.00$754.00Variable costs and expenses48.00182.00486.00Contribution margin$30.40$147.00$268.00Grinding and polishing time required0.4hrs1.5hrs4hrs
Ignoring the time constraint, what strategy would appear to be optimal?
The company should shift toward production of more
best
better
good
units.
What is the contribution margin per unit of limited resource for each type of binocular?(Round answer to 0 decimal places, e.g. 5,275.)
GoodBetterBestContribution margin per unit of limited resource$
$
$
If additional grinding and polishing time could be obtained, how should the additional capacity be used?
Additional capacity should be used to make
best
better
good
binoculars.
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