Outdoor Luggage Inc. makes high-end, hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit Variable cost per unit Plastic injection moulding machine processing time required per unit Kgs of plastic pellets per unit Ski Guard $310 $150 8 min 7 kg Golf Guard $330 $150 15 min 9 kg Fishing Guard $275 $85 5 min 10 kg Required: 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?

Outdoor Luggage Inc. makes high-end, hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit Variable cost per unit Plastic injection moulding machine processing time required per unit Kgs of plastic pellets per unit Ski Guard $310 $150 8 min 7 kg Golf Guard $330 $150 15 min 9 kg Fishing Guard $275 $85 5 min 10 kg Required: 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: 1 Mountain Monster Desert Dragon 2 Sales price $5,200.00 $5,300.00 3 Variable cost of goods sold 3,240.00 3,450.00 4 Manufacturing margin $1,960.00 $1,850.00 5 Variable selling expenses 712.00 1,108.00 6 Contribution margin $1,248.00 $742.00 7 Fixed expenses 470.00 320.00 8 Income from operations $778.00 $422.00 In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 4,800 4,650 Required: a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each.…
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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 Selling price per unit $ 310 Variable cost per unit $ 150 $ 330 $ 130 Fishing Gi $ 275 $ 85 Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit 8 minutes 7 pounds 15 minutes 9 pounds 5 minu 10 poun Required: 1. If the total time available on the plastic injection molding machine is the constraint, 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 a severe shortage of plastic pellets required the company to cut back 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? 4.…
Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. 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 Ski Guard $ 260 $ 100 Required 1 Required 2 6 minutes 15 pounds Required 3 Required 4 Required 5 Complete this question by entering your answers in the tabs below. 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? Contribution margin per minute of the constrained resource 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…
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