Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Dat
ID: 2536017 • Letter: O
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.
Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below.
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 $320 $150 Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit $310 $110 $265 $145 8 minutes 10 minutes 7 pounds16 pounds 10 minutes 6 pounds Required 1a. The total time available on the plastic injection molding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? Ski Guard Golf Guard Fishing Guard Selling price per unit Variable cost per unit Contribution margin per unit Plastic injection molding machine processing time required to produce one unit Contribution margin per unit of the constrained resource minutes minutes minutes 0 per minute 0 per minute 0 per minute 1b. Which product would be the most profitable use of this constraint? O Ski Guard O Fishing Guard Golf GuardExplanation / Answer
1a Ski guard Golf guard Fishing guard Selling price per unit 310 320 265 Variable cost per unit 110 150 145 Contribution margin per unit 200 170 120 Plastic injection molding machine processing time required to produce one unit 8 10 10 Contribution margin per unit of the constrained resource 25 17 12 b Ski guard c Fishing guard 2a Ski guard Golf guard Fishing guard Selling price per unit 310 320 265 Variable cost per unit 110 150 145 Contribution margin per unit 200 170 120 Pounds of plastic pellets required to produce one unit 7 16 6 Contribution margin per unit of the constrained resource 28.57 10.63 20 b Ski guard c Golf guard 3 Ski guard
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