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. Ski Guard Golf Guard Fishing Guard $260 $120 $205 $135 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 $330 $180 9 minutes 12 pounds 12 minutes 7 pounds 11 minutes 11 pounds 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? 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 0 $ 0 $ minutes minutes minutes 0 per minute 0 per minute 0 per minute

Explanation / Answer

1(a). Computation of contribution margin per unit of the constrained resources;

1(b) Sky Guard , due to highest contribution margin per minute of contrained resource.i.e $15.55

1(c) Finishing Guard , due to lowest contribution margin per minute of contrained resource.i.e $6.364

2(a) Computation of contribution margin per unit of the constrained resources;

Ski Guard Golf Guard Finishing Guard 1) Selling price per unit $ 260 330 205 2) Variable cost per unit 120 180 135 3) Contribution margin per unit (1-2) 140 150 70 4) plasting injection molding machine processing time required for producing one unit 9 minutes 12 minutes 11 minutes 5) Contribution margin per unit of constrained resource($) 15.55 per minute 12.5 per minute 6.364 per minute

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