FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Outdoor Luggage, Incorporated, 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
Selling price per unit
$ 310
Variable cost per unit
$ 150
$ 330
$ 130
Fishing Guard
$ 275
$ 85
Plastic injection molding machine processing time required to
produce one unit
Pounds of plastic pellets per unit
8 minutes
7 pounds
15 minutes
5 minutes
9 pounds
10 pounds
Required:
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?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Required 4 Required 5
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? (Round your final answers to 2 decimal places.)
Contribution margin per minute of the constrained resource
Ski Guard
per minute
Golf Guard
per minute
< Required 1
Required 2 >
Fishing Guard
per minute
expand button
Transcribed Image Text:Outdoor Luggage, Incorporated, 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 Selling price per unit $ 310 Variable cost per unit $ 150 $ 330 $ 130 Fishing Guard $ 275 $ 85 Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 8 minutes 7 pounds 15 minutes 5 minutes 9 pounds 10 pounds Required: 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 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? (Round your final answers to 2 decimal places.) Contribution margin per minute of the constrained resource Ski Guard per minute Golf Guard per minute < Required 1 Required 2 > Fishing Guard per minute
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