company’s most popular models appear below. Ski Guard Golf Guard Fishing Guard Selling price per unit $ 240 $ 370 $ 225 Variable cost per unit $ 100 $ 255 $ 105 Plastic injection molding machine processing time required to produce one unit 7 minutes 5 minutes 7 minutes Pounds of plastic pellets per unit 15
company’s most popular models appear below. Ski Guard Golf Guard Fishing Guard Selling price per unit $ 240 $ 370 $ 225 Variable cost per unit $ 100 $ 255 $ 105 Plastic injection molding machine processing time required to produce one unit 7 minutes 5 minutes 7 minutes Pounds of plastic pellets per unit 15
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 4P
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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 | Fishing Guard | ||||
|---|---|---|---|---|---|---|
| Selling price per unit | $ 240 | $ 370 | $ 225 | |||
| Variable cost per unit | $ 100 | $ 255 | $ 105 | |||
| Plastic injection molding machine processing time required to produce one unit | 7 | minutes | 5 | minutes | 7 | minutes |
| Pounds of plastic pellets per unit | 15 | pounds | 7 | pounds | 10 | pounds |
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?
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?
Transcribed Image Text: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? (Round your final answers to 2 decimal places.)
Contribution margin per pound of the constrained resource
Ski Guard
per pound
Golf Guard
per pound
Fishing Guard
per pound
Transcribed Image Text: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
Fishing Guard
per minute
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