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Sport Luggage Inc. makes high end hard sided luggage for sports equipment. Data concerning three of the company%u2019s most popular models appear below. |
| Ski Vault |
Golf Caddy |
Fishing Quiver |
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| Selling price per unit | $ | 260 | $ | 350 | $ | 245 | |||
| Variable cost per unit | $ | 100 | $ | 150 | $ | 105 | |||
| Plastic injection molding machine processing time required to produce one unit | 6 minutes | 12 minutes | 11 minutes | ||||||
| Pounds of plastic pellets per unit | 15 pounds | 15 pounds | 12 pounds | ||||||
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| 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. Omit the “$” sign in your response.) |
| Ski Vault | Golf Caddy | Fishing Quiver | ||||
| Contribution margin | $ | per minute | $ | per minute | $ | per minute |
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| 1b. | Which product would be the most profitable use of this constraint? | ||||||
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| 1c. | Which product would be the least profitable use of this constraint? | ||||||
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| 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. Omit the “$” sign in your response.) |
| Ski Vault | Golf Caddy | Fishing Quiver | ||||
| Contribution margin | $ | per pound | $ | per pound | $ | per pound |
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| 2b. | Which product would be the most profitable use of this constraint? | ||||||
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| 2c. | Which product would be the least profitable use of this constraint? | ||||||
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| 3. | Which product has the largest unit contribution margin? | ||||||
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