Ski Guard Golf Guard Fishing Guard Selling price per unit $280 $330 $175 Variabl
ID: 2551460 • Letter: S
Question
Ski Guard Golf Guard Fishing Guard Selling price per unit $280 $330 $175 Variable cost per unit $140 $210 $115 Plastic injection molding machine processing time required to produce one unit 4 minutes 12 minutes 9 minutes Pounds of plastic pellets per unit 12 pounds 15 pounds 13 pounds
T-Mobile Wi-Fi 7:18 PM ezto.mheducation.com Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment Data conceming three of the company's most popular models appear below Variable cost Plassic injedtion molding machine processing time required Pounds of plastic pelles per unit Required a. 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? 1b. Which product would be the most profitable use of this constraint? c. Which product would be the least profitable use of this constraint? 2a Asevere shortage of plastc pellets has required the company to back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastie pellets. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? 2b. Which product would be the most profitable use of this constraint? 2c. Which product would be the least profitable use of this constraint? 3. Which product has the largest unit contribution margin?
Explanation / Answer
1a.
Ski Guard
Golf Guard
Fishing Guard
Selling price per unit
$ 280
$ 330
$ 175
Variable cost per unit
$ 140
$ 210
$ 115
Contribution margin per unit
$ 140
$ 120
$ 60
÷Plastic inj. Molding machine processing time required to produce one unit
4 minutes
12 minutes
9 minutes
Contribution margin per unit of the constrained resources
$ 35
$ 10
$ 6.67
1b.
Ski Guard would be most profitable use of this constrained resource.
1c.
Fishing Guard would be least profitable use of this constrained resource.
2a.
Ski Guard
Golf Guard
Fishing Guard
Selling price per unit
$ 280
$ 330
$ 175
Variable cost per unit
$ 140
$ 210
$ 115
Contribution margin per unit
$ 140
$ 120
$ 60
÷Pounds of plastic pellets required to produce one unit
12 pounds
15 pounds
13 pounds
Contribution margin per unit of the constrained resources
$ 11.67
$ 8.00
$ 4.62
2b.
Ski Guard would be most profitable use of this constrained resource.
2c.
Fishing Guard would be least profitable use of this constrained resource.
3.
Ski Guard has the largest unit contribution margin ratio.
Ski Guard
Golf Guard
Fishing Guard
Selling price per unit
$ 280
$ 330
$ 175
Variable cost per unit
$ 140
$ 210
$ 115
Contribution margin per unit
$ 140
$ 120
$ 60
÷Plastic inj. Molding machine processing time required to produce one unit
4 minutes
12 minutes
9 minutes
Contribution margin per unit of the constrained resources
$ 35
$ 10
$ 6.67
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