Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Fishing Guard Ski Golf Guard $ Guard Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 260 $ 350 $ 150 $ 245 100 $ 105 6 minutes 12 minutes 11 minutes 15 pounds 20 pounds 12 pounds Required: 1. 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? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. 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?

Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Fishing Guard Ski Golf Guard $ Guard Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 260 $ 350 $ 150 $ 245 100 $ 105 6 minutes 12 minutes 11 minutes 15 pounds 20 pounds 12 pounds Required: 1. 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? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. 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?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 9PA: Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to...

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Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below. SkiGuard GolfGuard FishingGuard Selling price per unit $ 250 $ 250 $ 255 Variable cost per unit $ 160 $ 140 $ 155 Plastic injection molding machine processingtime required to produce one unit 13 minutes 6 minutes 5 minutes Pounds of plastic pellets per unit 7 pounds 10 pounds 6 pounds Required: 1. 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? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. 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…
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 $ 260 $ 270 $ 305 Variable cost per unit $ 130 $ 130 $ 180 Plastic injection molding machine processing time required to produce one unit 4 minutes 6 minutes 9 minutes Pounds of plastic pellets per unit 9 pounds 16 pounds 7 pounds Required: 1. 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? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. 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…
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 $ 230 $ 330 $ 265 Variable cost per unit $ 90 $ 150 $ 105 Plastic injection molding machine processing time required to produce one unit 4 minutes 10 minutes 5 minutes Pounds of plastic pellets per unit 5 pounds 11 pounds 12 pounds Required: 1. 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? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. 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…
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?
Outdoor Luggage Inc. makes high-end, hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below. SkiGuard GolfGuard FishingGuard Selling price per unit $ 280 $ 330 $ 175 Variable cost per unit $ 140 $ 210 $ 115 Plastic injection moulding machineprocessing time required per unit 4 min 12 min 9 min Kgs of plastic pellets per unit 12 kg 15 kg 13 kg 1-a. The total time available on the plastic injection moulding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? 1-b. Which product would be the most profitable use of this constraint? Ski Guard Fishing Guard Golf Guard 1-c. Which product would be the least profitable use of this constraint? Ski Guard Fishing Guard Golf Guard 2-a. A severe shortage of plastic pellets has required the company to cut…
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 $ 230 $ 330 $ 265 Variable cost per unit $ 90 $ 150 $ 105 Plastic injection molding machine processing time required to produce one unit 4 minutes 10 minutes 5 minutes Pounds of plastic pellets per unit 5 pounds 11 pounds 12 pounds Required: 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit?
Snow, Inc. makes three kinds of snowboards, but it has limited number of machine hours available to make them. Product line data are as follows: Wood                    Plastic                   Graphite Machine hours per unit                     1.25                 1.0                          1.5 Selling price per unit                         P100                  P120                      P200 Variable mfg. cost per unit                   45                      50                       100 Variable selling cost per unit                15                     26                           36 In what order should the snowboard product lines be produced? Wood, Plastic, then Graphite Plastic, Graphite, then Wood Graphite, Wood, then Plastic none of the above Group of answer choices 1 2 3 4
Glassworks makes products for the sandblasting industry. One of the products they make is bags of high-grade sandblasting media that is made from a combination of quartz-sand and recycled ground-glass (cullet). Standard costs and quantities to produce one bag of sandblasting media are as follows:                         Quantity          Cost Quartz-sand    20 kg               $4.00 Cullet               5 kg                $3.00 80,000 bags of sandblasting media were produced. Actual purchases and inventories were:                         Beginning           Ending          Purchases        Purchases                         Inventory         Inventory              (in kg)            ( in $) Quartz-sand       0 kg                          0 kg       1,610,000 kg   $322,161 Cullet                  0 kg              120,000 kg         550,000 kg    $286,000 Required: Calculate the following variances: a)Total direct material efficiency variance. b)Total direct material mix variance.…
Mattress Comfort Corporation manufactures two types of mattresses, Dreamer and Sleeper. Dreamer has a complex design that uses gel-filled compartments to provide support. Sleeper is simpler to manufacture and uses conventional padding. Last year, Mattress Comfort had the following revenues and costs:                                                                        Dreamer       Sleeper       Total Revenue                                          $1,200,000 $900,000      $2,100,000 Direct Materials                              500,000    450,000    950,000 Direct Labor                                             250,000    200,000    450,000 Indirect Costs:          Administration                                                                    80,000          Production Setup                                                                 100,000          Quality Control                                                                    120,000…
Mattress Comfort Corporation manufactures two types of mattresses, Dreamer and Sleeper. Dreamer has a complex design that uses gel-filled compartments to provide support. Sleeper is simpler to manufacture and uses conventional padding. Last year, Mattress Comfort had the following revenues and costs: Dreamer Sleeper Total Revenue $1,200,000 $900,000 $2,100,000 Direct Materials 500,000 450,000 950,000 Direct Labor 250,000 200,000 450,000 Indirect Costs: Administration 80,000 Production Setup…
Ellix Company manufactures two models of ultra-high fidelity speakers—the X200 model and the X99 model. Data regarding the two products follow: Product Direct Labor-Hours Annual Production Total Direct Labor-Hours X200 0.4 DLHs per unit 17,000 units 6,800 DLHs X99 0.6 DLH per unit 40,000 units 24,000 DLHs 30,800 DLHs Additional information about the company follows: Model X200 requires $35 in direct materials per unit, and model X99 requires $24. The direct labor workers are paid $20 per hour. The company has always used direct labor-hours as the allocation base for applying manufacturing overhead cost to products. Model X200 is more complex to manufacture than model X99 and requires special equipment. Because of the special work required in (d) above, the company is considering an activity-based absorption costing that applies manufacturing overhead cost to products using three activity cost pools: Activity Cost Pool Activity Measure Estimated Total Cost…
Blue Devil Inc. is an auto part maker, and produces a particular product: Model RX300. The standard costs and actual production results are listed as follows: Cost standards for one unit of product Model RX300: Cost Standards Total Direct material 3 pounds at $2.5 per pound $7.5 Direct labor 5 hours at $8 per hour $40 Variable overhead 2.5 hours at $12 per hour $30 Actual production results: Units produced 8,000 units Direct material purchased 23,500 pounds at $2.70 per pound Direct material used 23,500 pounds at $2.70 per pound Direct labor 42,000 hours at $7.8 per hour Variable overhead 20,500 hours at $11.5 per hour Required: a. Determine the direct material price and quantity variance, and identify whether the variances are Favorable or Unfavorable. b. Determine the direct labor rate and efficiency variance, and identify whether the variances are Favorable or Unfavorable. c. Determine the variable overhead spending and efficiency variance.