Container Solutions produces plastic storage bins for household storage needs. 1(Click the icon to view additional information.) Sales prices and variable costs are as follows: 2(Click the icon to view the costs.) Read the requirements3. Requirement 1. Which product should Container Solutions emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. Container Solutions Product Mix Analysis Regular Large Sales price per unit Variable cost per unit Contribution margin per unit Units per machine hour × × Contribution margin per machine hour Which product should Container Solutions emphasize? Why? Container Solutions should emphasize the production of (1) because this product has the higher (2) Requirement 2. To maximize profits, how many of each size bin should Container Solutions produce? (Enter a "0" for any zero amounts.) Container Solutions should spend machine hours making regular size bins, and machine hours making large size bins. Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period Contribution margin per regular size bin × Total contribution margin Fixed costs Operating income 1: More Info The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the products is so high that Container Solutions can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for 3,000 hours per period. Container Solutions can produce 11 large bins every hour, whereas it can produce 15 regular bins in the same amount of time. Fixed costs amount to $85,000 per period. 2: Data Table Regular Large Sales price per unit $9.00 $11.00 Variable costs per unit 3.20 4.30 3: Requirements 1. Which product should Container Solutions emphasize? Why? 2. To maximize profits, how many of each size bin should Container Solutions produce? 3. Given this product mix, what will the company's operating income be? (1) large bins regular bins (2) contribution margin per machine hour. contribution margin per unit. sales price per unit. variable cost per unit.

Container Solutions produces plastic storage bins for household storage needs. 1(Click the icon to view additional information.) Sales prices and variable costs are as follows: 2(Click the icon to view the costs.) Read the requirements3. Requirement 1. Which product should Container Solutions emphasize? Why? Complete the product mix analysis to determine the contribution margin per machine hour. Container Solutions Product Mix Analysis Regular Large Sales price per unit Variable cost per unit Contribution margin per unit Units per machine hour × × Contribution margin per machine hour Which product should Container Solutions emphasize? Why? Container Solutions should emphasize the production of (1) because this product has the higher (2) Requirement 2. To maximize profits, how many of each size bin should Container Solutions produce? (Enter a "0" for any zero amounts.) Container Solutions should spend machine hours making regular size bins, and machine hours making large size bins. Requirement 3. Given this product mix, what will the company's operating income be? Number of regular size bins per period Contribution margin per regular size bin × Total contribution margin Fixed costs Operating income 1: More Info The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the products is so high that Container Solutions can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for 3,000 hours per period. Container Solutions can produce 11 large bins every hour, whereas it can produce 15 regular bins in the same amount of time. Fixed costs amount to $85,000 per period. 2: Data Table Regular Large Sales price per unit $9.00 $11.00 Variable costs per unit 3.20 4.30 3: Requirements 1. Which product should Container Solutions emphasize? Why? 2. To maximize profits, how many of each size bin should Container Solutions produce? 3. Given this product mix, what will the company's operating income be? (1) large bins regular bins (2) contribution margin per machine hour. contribution margin per unit. sales price per unit. variable cost per unit.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...

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Related questions

Question

Container Solutions

produces plastic storage bins for household storage needs.

1(Click

the icon to view additional information.)

Sales prices and variable costs are as follows:

2(Click

the icon to view the costs.)

Read the

requirements3.

Requirement 1. Which product should

Container Solutions

emphasize? Why?

Complete the product mix analysis to determine the contribution margin per machine hour.

Container Solutions
Product Mix Analysis
	Regular	Large
Sales price per unit
Variable cost per unit
Contribution margin per unit
Units per machine hour	×		×
Contribution margin per machine hour

Which product should

Container Solutions

emphasize? Why?

Container Solutions

should emphasize the production of

(1)

because this product has the higher

(2)

Requirement 2. To maximize profits, how many of each size bin should

Container Solutions

produce? (Enter a "0" for any zero amounts.)

Container Solutions should spend		machine hours making		regular size bins, and
machine hours making		large size bins.

Requirement 3. Given this product mix, what will the company's operating income be?

Number of regular size bins per period
Contribution margin per regular size bin	×
Total contribution margin
Fixed costs
Operating income

1: More Info

The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the products is so high that

Container Solutions

can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for

3,000

hours per period.

Container Solutions

can produce

large bins every hour, whereas it can produce

regular bins in the same amount of time. Fixed costs amount to

$85,000

per period.

2: Data Table

	Regular	Large
Sales price per unit	$9.00	$11.00
Variable costs per unit	3.20	4.30

3: Requirements

1.	Which product should Container Solutions emphasize? Why?
2.	To maximize profits, how many of each size bin should Container Solutions produce?
3.	Given this product mix, what will the company's operating income be?

(1)

large bins

regular bins

(2)

contribution margin per machine hour.

contribution margin per unit.

sales price per unit.

variable cost per unit.

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