The plastic injection molding machine, Accounting Basics

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The plastic injection molding machine

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

Which product has the largest unit contribution margin?

	Ski Vault
	Fishing Quiver
	Golf Caddy

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Accounting Basics: The plastic injection molding machine

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Accounting Basics: The plastic injection molding machine

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Recent Questions Asked Accounting Basics

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Accounting Basics: The plastic injection molding machine

Reference No:- TGS0680153

Recent Questions Asked Accounting Basics

Q : Constraint on the decision variables and the total cost

Q : Determine the financial statements relating to depreciation

Q : Calculate deprecation expense

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