Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. D

Question

Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below Ski Guard Golf Guard Fishing Guard Selling price per unit Variable cost per unit Plastic injection molding machine processing 300 $ 160 $ 380 $ 170 $ 225 75 4 minutes 6 pounds 7 minutes 6 minutes time required to produce one unit Pounds of plastic pellets per unit 11 pounds 13 pounds Required 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, hovw much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit?

Explanation / Answer

Contribution margin per minute :

Contribution margin per pound :

Ski guard Golf guard Fishing guard Selling price per unit 300 380 225 Variable cost per unit 160 170 75 Contribution margin per unit 140 210 150 Minute per unit 7 6 4 Contribution margin per minute 20 35 37.5

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.