Exercise 10-5 Utilizing a Constrained Resource [LO10-5] Outdoor Luggage Inc. mak
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Question
Exercise 10-5 Utilizing a Constrained Resource [LO10-5]
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
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Ski guard Golf Guard Fishing Guard Sales price per unit 200.00 300.00 255.00 Variable cost per unit (60.00) (140.00) (55.00) Contribution per unit 140.00 160.00 200.00 Plastic injection molding machine processing time required to produce one unit 2.00 5.00 4.00 1a) Contribution per minute 70.00 32.00 50.00 Most Profitable Least profitable 1b 1-c Contribution per unit 140.00 160.00 200.00 Pounds of plastic pellets per unit 7.00 4.00 8.00 Contribution per pound 20.00 40.00 25.00 Least profitable Most profitable 2-c 2-b 3) fishing guard has highest contribution margin
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