(Please show calculations for study purposes)
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 | $ | 230 | $ | 330 | $ | 265 | ||||||
Variable cost per unit | $ | 90 | $ | 150 | $ | 105 | ||||||
Plastic injection molding machine processing time required to produce one unit |
4 minutes | 10 minutes | 5 minutes | |||||||||
Pounds of plastic pellets per unit | 5 pounds | 11 pounds | 12 pounds | |||||||||
Required: Constrained Resources - Most Profitable Use Decision
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?
1) | ski | Golf | fishing | ||||
Guard | Gurard | Guard | |||||
Selling price per unit | 230 | 330 | 265 | ||||
Variable cost per unit | 90 | 150 | 105 | ||||
contribution margin | 140 | 180 | 160 | ||||
machine processing min | 4 | 10 | 5 | ||||
Contribution margin per min | 35.00 | 18.00 | 32.00 | ||||
2) | Ski guard | ||||||
3) | ski | Golf | fishing | ||||
Guard | Gurard | Guard | |||||
Selling price per unit | 230 | 330 | 265 | ||||
Variable cost per unit | 90 | 150 | 105 | ||||
contribution margin | 140 | 180 | 160 | ||||
pounds per unit | 5 | 11 | 12 | ||||
Contribution margin per pound | 28.00 | 16.36 | 13.33 | ||||
4) | Ski guard | ||||||
5) | Golf guard has largest contribution | ||||||
(Please show calculations for study purposes) Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment....
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. points Skipped 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 Ski Golf Guard Guard 320 $ 320 $ 119 $ 139 $ 13 minutes 10 minutes 12 pounds 7 pounds Fishing Guard 275 95 2 minutes 14 pounds eBook Required: 1. If...
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 Fishing Guard 320 $ Guard Selling price per unit Variable cost per unit Plastic injection molding machine processing tine required to produce one unit Pounds of plastic pellets per unit 25e 235 110 200 135 13 minutes 5 minutes 11 minutes 14 pounds 7 pounds 6 pounds Required: 1. If we assume that the total time...
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. 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 Ski Golf Fishing Guard Guard Guard 260 $ 270 $ 305 130 $ 130 $ 180 4 minutes 6 minutes 9 minutes 9 pounds 16 pounds 7 pounds Required: 1. If we assume that...
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. 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 13 Golf Pishing Guard Guard $ 380 $ 225 170 6 minutes 4 minutes 13 pounds 6 pounds minutes Required: 1. If we assume that the total time available on the plastic injection molding...
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 270 $ 160 $ Golf Guard 250 $ 170 $ Fishing Guard 185 85 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 9 pounds 6 minutes 9 pounds 2 minutes 7 pounds Required: 1. If we assume that...
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 240 $ 120 $ Golf Guard 330 $ 180 $ Pishing Guard 285 130 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 11 minutes 9 pounds 8 minutes 15 minutes 6 pounds 15 pounds Required: 1. If we assume that...
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. 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 Ski Guard $ 250 $ $ 160 $ 13 minutes 7 pounds Golf Guard 250 $ 140 $ 6 minutes 10 pounds Fishing Guard 255 155 5 minutes 6 pounds Required: 1. If we...
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 240 $ 100 $ Golf Guard 370 $ 255 $ Fishing Guard 225 105 " " 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 7 minutes 5 minutes 7 minutes 15 pounds 7 pounds 10 pounds Required: 1. If we...
Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. $ 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 Ski Golf Fishing Guard Guard Guard 310 $ 390 $ 215 70 $ 160 $ 95 11 minutes 11 minutes 2 minutes 14 pounds 7 pounds 15 pounds Required: 1. If we assume...
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 $ 320 $ 320 $ 275 Variable cost per unit $ 110 $ 130 $ 95 Plastic injection molding machine processing time required to produce one unit 13 minutes 10 minutes 2 minutes Pounds of plastic pellets per unit 12 pounds 7 pounds 14 pounds Required: 1. If we...