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 6 minutes 15 pounds Golf Guard $ 350 $ 150 12 minutes 20 pounds Fishing Guard $ 245 $ 105 11 minutes 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

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 6 minutes 15 pounds Golf Guard $ 350 $ 150 12 minutes 20 pounds Fishing Guard $ 245 $ 105 11 minutes 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

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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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.…
Homework help. Chapter 25, number 5. Need help filling in the blanks. Thank you!
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required 1 Required 2 Required 3 Recliner $ 1,184 $ 800 Complete this question by entering your answers in the tabs below. Additional contribution margin per hour Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for…
Lifemaster produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that Lifemaster could use all of its available machine hours producing either model. The two models are processed through the same production department. A B C 1 Per Unit 2 Deluxe Regular 3 Sale price $1,020 $580 4 Less expenses: 5 Direct materials 280 100 6 Direct labor 92 184 7 Variable manufacturing overhead 246 82 8 Fixed manufacturing overhead* 114 38 9 Variable operating expenses 119 61 10 Total expenses $851 $465 11 Operating income $169 $115 *Allocated on the basis of machine hours What product mix will maximize operating income? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Prepare the product mix analysis.
Veritas is a startup that makes running t-shirts using high-tech fabric. The company has the following cost structure: Total cost = $50,000 + ($25 x number of t-shirts) The amount $50,000 is the: O Cost of Direct Material Cost of Good Sold O Fixed Cost O Overhead Rate O Total Variable Cost
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Bonita Industries has gathered the following information for one model of its hiking boots: Variable manufacturing costs Variable selling and administrative costs Fixed manufacturing costs Fixed selling and administrative costs Investment ROI Planned production and sales What is the total cost per pair of boots? O $118 O $54 O $166 $86 $80000 $40000 $190000 $120000 $1700000 30 % 5000 pairs
The Rosa model of Mohave Corporation is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave’s two options follows: Rosa Umbrella Decorated Umbrella Estimated demand 11,000 units 11,000 units Estimated sales price $ 9.00 $ 20.00 Estimated manufacturing cost per unit Direct materials $ 3.50 $ 5.50 Direct labor 1.50 4.00 Variable manufacturing overhead 0.50 2.50 Fixed manufacturing overhead 2.00 2.00 Unit manufacturing cost $ 7.50 $ 14.00 Additional development cost $ 11,000 Required: 1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations. 2. Should Mohave add decorations to the Rosa umbrella? 3-a.Suppose the higher price of the decorated umbrella is expected to…