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

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 Golf Fishing Guard Guard Guard Selling price per unit Variable cost per unit Plastic injection molding machine $310 $330 $275 $85 $150 $150 8 minutes 7 processing 15 time required to produce one unit Pounds of plastic pellets per unit minutes 10 minutes pounds pounds 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? (Round your answers to 2 decimal places.) Ski Guard Golf Guard Fishing Guar Selling price per unit Variable cost per unit Contribution margin per unit Plastic injection molding machine processing time required to produce one unit minutes minutes minutes Contribution margin per unit of the constrained resource minute minute minute 1b.Which product would be the most profitable use of this constraint? O Fishing Guard O Golf Guard O Ski Guard 1c. Which product would be the least profitable use of this constraint? O Fishing Guard O Golf Guard O Ski Guard

Explanation / Answer

1a).

1b). Fishing Guard is the most profitable use of constraint.

1c). Golf Guard is the least profitable use of constraint.

2a).

2b). Ski Guard is the most profitable use of constraint.

2c). Fishing Guard is the least profitable use of constraint.

3). Fishing Guard has the highest contribution margin per unit, that is $190 per unit.

Particulars Ski Guard Golf Guard Fishing Guard Selling Price per unit $310 $330 $275 Variable cost per unit $150 $150 $85 Contribution margin per unit $160 $180 $190 Plastic injection molding machine processing time required to produce one unit 8 min. 15 min. 5 min. Contribution margin per unit of the constrained resource $20 per min. $12 per min. $38 per min.

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