Outdoor Luggage, Inc., makes high-end hard-sided luggage forsports equipment. Data concerning three of the company’s mostpopular models appear below.
| Ski
Guard | Golf
Guard | Fishing
Guard |
| Selling price per unit | $ | 280 | | $ | 200 | | $ | 245 | |
| Variable cost per unit | $ | 90 | | $ | 160 | | $ | 115 | |
Plastic injection molding machine processing
time required to produce one unit | 6 minutes | | 14 minutes | | 2 minutes | |
| Pounds of plastic pellets per unit | 12 pounds | | 10 pounds | | 8 pounds | |
|
Required:
1. If we assume that the total time available on the plasticinjection molding machine is the constraint in the productionprocess, how much contribution margin per minute of the constrainedresource is earned by each product?
2. Which product offers the most profitable use of the plasticinjection molding machine?
3. If we assume that a severe shortage of plastic pellets hasrequired the company to cut back its production so much that itsnew constraint has become the total available pounds of plasticpellets, how much contribution margin per pound of the constrainedresource is earned by each product?
4. Which product offers the most profitable use of the plasticpellets?
5. Which product has the largest contribution margin perunit?
