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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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)
(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.
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