Store-It produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 11 Large bins every hour compared to 16 Regular bins in the same amount of time. Fixed expenses amount to $105,000 per period. Sales prices and variable (Click the icon to view the costs.) costs are as follows: 1. Which product should Store-It emphasize? Why? 2. To maximize profits, how many of each size bin should the company produce? 3. Given this product mix, what will the company's operating income be? 1. Which product should Store-It emphasize? Why? Complete the product mix analysis to determine which product Store-It should emphasize. Store-It Sales price per unit Less Variable cost per unit. Contribution margin per unit Units per machine hour Product Mix Analysis Regular Large Contribution margin per machine hour Decision Store-It should emphasize the production of because the is higher 2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.) Number of Regular bins Store-It should make Number of Large bins Store-It should make 3. Given the product mix determined in the previous step, calculate Store-It's operating income for the period Number of bins per period Contribution margin per bin Total contribution margin Less Fixed expenses Operating income Data table Regular Large Sales price per unit......... S Variable cost per unit 8.00 $ 10.00 3.50 $ 4.30 Print Done X Time Remaining: 02:09:42 Show work Next
Store-It produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 11 Large bins every hour compared to 16 Regular bins in the same amount of time. Fixed expenses amount to $105,000 per period. Sales prices and variable (Click the icon to view the costs.) costs are as follows: 1. Which product should Store-It emphasize? Why? 2. To maximize profits, how many of each size bin should the company produce? 3. Given this product mix, what will the company's operating income be? 1. Which product should Store-It emphasize? Why? Complete the product mix analysis to determine which product Store-It should emphasize. Store-It Sales price per unit Less Variable cost per unit. Contribution margin per unit Units per machine hour Product Mix Analysis Regular Large Contribution margin per machine hour Decision Store-It should emphasize the production of because the is higher 2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.) Number of Regular bins Store-It should make Number of Large bins Store-It should make 3. Given the product mix determined in the previous step, calculate Store-It's operating income for the period Number of bins per period Contribution margin per bin Total contribution margin Less Fixed expenses Operating income Data table Regular Large Sales price per unit......... S Variable cost per unit 8.00 $ 10.00 3.50 $ 4.30 Print Done X Time Remaining: 02:09:42 Show work Next
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Store-It produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is
used to produce both sizes. The machinery is available for only 3,300 hours per period. The company can produce 11 Large bins every hour compared to 16 Regular bins in the same amount of time. Fixed expenses amount to $105,000 per period. Sales prices and variable
(Click the icon to view the costs.)
costs are as follows:
1. Which product should Store-It emphasize? Why?
2. To maximize profits, how many of each size bin should the company produce?
3. Given this product mix, what will the company's operating income be?
1. Which product should Store-It emphasize? Why?
Complete the product mix analysis to determine which product Store-It should emphasize.
Store-It
Sales price per unit
Less Variable cost per unit.
Contribution margin per unit
Units per machine hour
Product Mix Analysis
Regular
Large
Contribution margin per machine hour
Decision Store-It should emphasize the production of
because the
is higher
2. To maximize profits, how many of each size bin should the company produce? (Complete all input fields. Enter a "0" if no bins should be produced.)
Number of Regular bins Store-It should make
Number of Large bins Store-It should make
3. Given the product mix determined in the previous step, calculate Store-It's operating income for the period
Number of bins per period
Contribution margin per bin
Total contribution margin
Less Fixed expenses
Operating income
Data table
Regular
Large
Sales price per unit......... S
Variable cost per unit
8.00 $ 10.00
3.50 $ 4.30
Print
Done
X
Time Remaining: 02:09:42
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