Exercise 10-5 Utilizing a Constrained Resource [LO10-5] Outdoor Luggage Inc. mak

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 Ski Guard Golf Guard Fishing Guard $300 $150 $370 $200 $235 $145 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 10 minutes 11 pounds 11 minutes 6 pounds 10 minutes 13 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? (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 minute per minute

Explanation / Answer

1a) Contribution margin per unit of Constrained resources :

2a) Contribution margin per unit of Constrained resources :

Ski guard Gold guard Fishing guard Selling price per unit 300 370 235 Variable cost per unit 150 200 145 Contribution margin per unit 150 170 90 Minutes per unit 10 11 10 Contribution margin per units of constrained resources 15 15.45 9

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