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. Guard Golf Guard 250 $ 170 $ Fishing Guard 185 Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 5 minutes minutes 9 pounds 2 minutes 7 pounds 9 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 . B Required 1 Required 2 Required 3 Required 2 DE E If we assume that the total time available on the plastic much contribution margin per minute of the constrained resource places.) hine is the constraint in the production process, how earned by each product? (Round your final answers to 2 decimal SM Gua per minute Golf Guard per minute Fishing Guard per minute Contribution margin per minute of the constrained resource . .

Answer 1

calculation of contribution argin per minute: I Palliulas Ski Golf finishing, A Guard Guard Guard. sales per unit $270 $250 $185 cessi variable cost Ree unit 160 170 contribution margin 110 180 100 per unit l constraint 5 6 2. em unit of 22 1333. 50. constraint 85 manufacturing of thishing guard would be the most profitable use of the constraint ance, it has the maximum contribution margin per unit of constraint ($50 per unit) 3) calculation of cm pee pound as the constraint: Particulars stard Gout finishing couard hand sales per unit $270 250 185. cess: variable cost p.u. 160 170 85 cm per unit 110 80 100. plastic pellet p. u. 9 pound a 2. Tem per pound. 12.22 8.89 14.29. The finishing guard would be the most profitable use of this constraint since it has the maximum contribution margin per unit of constraint $14.29 per unit)

5 stiguard has the largest contribution margin per unit Collo per unit)

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