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


 Ski
Vault		 Golf
Caddy		 Fishing   
Quiver   
  Selling price per unit $ 320
$ 320
$ 275  
  Variable cost per unit $ 110
$ 130
$ 95
  Plastic injection molding machine processing    time required to produce one unit 13 minutes 10 minutes 2 minutes
  Pounds of plastic pellets per unit 12 pounds 7 pounds 14 pounds

Required:
1a.

The total time available on the plastic injection molding machine is the constraint in the production process. What is contribution margin per unit of the constrained resources for Ski Vault, Golf Caddy and Fishing Quiver? (Round your answers to 2 decimal places.)

Ski Vault           Golf Caddy        Fishing Quiver          
  Contribution margin $ per minute $ per minute $ per minute

1b. Which product would be the most profitable use of this constraint?




Fishing Quiver

Ski Vault

Golf Caddy
1c. Which product would be the least profitable use of this constraint?




Fishing Quiver

Ski Vault

Golf Caddy
2a.

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 Vault, Golf Caddy and Fishing Quiver? (Round your answers to 2 decimal places.)

Ski Vault     Golf Caddy    Fishing Quiver         
  Contribution margin $ per pound $ per pound $ per pound

2b. Which product would be the most profitable use of this constraint?




Golf Caddy

Fishing Quiver

Ski Vault
2c. Which product would be the least profitable use of this constraint?




Golf Caddy

Fishing Quiver

Ski Vault
3. Which product has the largest unit contribution margin?




Ski Vault

Fishing Quiver

Golf Caddy

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9952888

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