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 Guard Golf Guard Guard Selling price per unit Variable cost per unit Plastic injection molding machine processing ime required to produce one unit Pounds of plastic pel lets per unit $310 $150 $330 $150 $275 $85 8 minutes 7 pounds 15 minutes 9 pounds 5 minutes 10 pounds 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 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 per minute per minute per minute 1b. Which product would be the most profitable use of this constraint? Fishing Guard Golf Guard Ski Guard c. Which product would be the least profitable use of this constraint? Fishing Guard O Golf Guard Ski Guard

Explanation / Answer

Requirement 1a: 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 (min) 8 15 5 Contribution margin per unit of constrained resource 20 12 38 Requirement 1b: Most profitable Fishing Guard Requirement 1c: Least Profitable Golf Guard Requirement 2a: 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 Pounds of Plastic pellets required to produce one unit 7 9 10 Contribution margin per unit of constrained resource 23 20 19 Requirement 2b: Most Profitable Ski Guard Requirement 2c: Least Profitable Fishing Guard Requirement 3: Product with largest Unit Contribution Margin Fishing Guard

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