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 310 $ 70 $ 390 $ 160 $ 215 95 11 minutes 11 minutes 2 minutes 14 pounds 7pounds 15 pounds time required to produce one unit Pounds of plastic pellets per unit 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.

Explanation / Answer

1)

2) The Fishing Guard being higher contribution per minute.

3)

4) The Golf Guard being higher contribution per pound.

5) Largest contribution margin per unit is of SKi Guard with $240 per unit.

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   Ski Golf Fishing Contribution per unit 310-70=$240 390-160=230 215-95=$120 Injection molding machine time required 11min 11min 2min Contribution per minute $21.82 $20.91 $60

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