Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Dat

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.

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?

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?

Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below.

Explanation / Answer

1a Contribution margin per unit of the constrained resource (A) ÷ (B) $46 $33.33 $50 1b Production of the Fishing Guard product would be the most profitable use of the constrained resource which is, in this case, time on the plastic injection molding machine. The contribution margin per minute is $50 for this product, which is larger than for the other two products. 1c Production of the Golf Guard product would be the most least use of the constrained resource which is, in this case, time on the plastic injection molding machine. The contribution margin per minute is $33.33 for this product, which is less than for the other two products. 2a Contribution margin per unit of the constrained resource (A) ÷ (C) $38.33 $13.33 $25.00 2b In this case, production of the Ski Guard would be the most profitable use of the constrained resource. The contribution margin per unit of the constrained resource for this product is $38.33, which is larger than for the other two products. 2c In this case, production of the Golf Guard would be the most least use of the constrained resource. The contribution margin per unit of the constrained resource for this product is $13.33, which is less than for the other two products. 3 Ski Guard has the large margin of contrinution combining all $84.33.

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.