Question

4. value: 1.25 points 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 $280 $140 Golf Guard $330 $210 Fishing Guard $175 $115 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 1 4 12 minutes minutes minutes 12 13 pounds pounds pounds 15 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 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 minutes per minute per per minute minute 1b. Which product would be the most profitable use of this constraint? Ski Guard Fishing Guard Golf Guard 1c. Which product would be the least profitable use of this constraint? Ski Guard Fishing Guard Golf Guard 2a. A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)

Answer 1

1a Particulars Ski Guard Golf Gaurd Fishing Guard Sno 1 Selling Price Per Unit 280 330 175 210 2 Variable cost Per Unit 140 115 3 Contribution Margin Per unit(1-2) Plastic Injection modeling machine Processing time 4 required to produce one unit 140 120 60 4 Minutes 12 Minutes 9 Minutes 10 Per Minute 6.67 Per Minute 5 Contribution Margin Per unit of constrained 35 Per Minute 6 Ranking 1 2. 3 1b Ski Guard most profitable as it has highest contribution margin per uniit of constrained Fishing Guard less profitable as it has highest contribution margin per uniit of constrained 1c 2a Particulars 1Selling Price Per Unit Ski Guard Golf Gaurd Fishing Guard Sno 280 330 175 2 Variable cost Per Unit 210 140 115 3 Contribution Margin Per unit(1-2) 4 Pounds of plastic pallets per unit Contribution Margin Per unit of constrained 5 resources(3/4) 6 Ranking 140 120 60 12 Pounds 15 Pounds 13 Pounds 4.62 Per Pound 11.67 Per Pound 8 Per Pound 1 2 3