Sport Luggage Inc. makes high-end hard-sided luggage for sports equipment - 17436

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yousafbhutta

yousafbhutta

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  • From: Business,
  • Posted on: Tue 28 May, 2013
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Request Description

 

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

$

220

 

$

300

 

$

175  

 

  Variable cost per unit

$

60

 

$

120

 

$

55  

 

  Plastic injection molding machine processing    time required to produce one unit

4 minutes

5 minutes

2 minutes

  Pounds of plastic pellets per unit

5 pounds

6 pounds

5 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? (Omit the "$" sign in your response.)

1b.

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

1c.

Which product would be the least profitable use of this constraint?

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? (Omit the "$" sign in your response.)

2b.

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

2c.

Which product would be the least profitable use of this constraint?

3.

Which product has the largest unit contribution margin?

 

Solution Description

 

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Ch12 Q3.docx
Ch12 Q3.docx