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 210 $ 70 $ 310 $ 150 $ 265 130 8 minutes 10 minutes 10 minutes 6 pounds time required to produce one unit Pounds of plastic pellets per unit 7 pounds 16 pounds Required 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how 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? Complete this question by entering your answers in the tabs below. Required1 Required 2 Required 3 Required 4 Required 5 If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? (Round your final answers to 2 decimal

Explanation / Answer

SkiGuard Golf Guard Fishing Guard Selling price per unit 210 310 265 Variable cost per unit 70 150 130 Contribution margin per unit 140 160 135 Plastic injection molding machine processing time required to produce one unit 8 10 10 Contribution margin per unit of the constrained resource 17.5 16 13.5 SkiGuard Golf Guard Fishing Guard Selling price per unit 210 310 265 Variable cost per unit 70 150 130 Contribution margin per unit 140 160 135 Pounds of plastic pellets required to produce one unit 7 16 6 Contribution margin per unit of the constrained resource 20 10 22.5

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