Question

urgent help needed. thanks in advance!

Exercise 12-5 Utilizing a Constrained Resource [LO12-5) Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Guard $300 $160 Golf Guard $380 $170 Fishing Guard $225 $75 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 7 6 4 minutes minutes minutes 11 13 6 pounds pounds pounds. ces Required: 1a. The total time available on the plastic injection molding 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? Ski Guard Golf Guard Fishing Guard $ 300$ 380 $ 225 160 170 75 $ 1401 $ 210 $ 150 Selling price per unit Variable cost per unit Contribution margin per unit Plastic injection molding machine processing time required to produce one unit Contribution margin per unit of the constrained resource 7 minutes per $ 20.00 minute 6 minutos 4 minutes $ per $ per 35.00 minute 37.50 minute 1b. Which product would be the most profitable use of this constraint? Fishing Guard Skl Guard Golf Guard 1c. Which product would be the least profitable use of this constraint? Fishing Guard Skl Guard Golf Guard

Answer 1

Part 1.a	If Plastic injection molding is constraint
		Ski Guard	Golf Guard	Finishing Guard
	Selling Price per unit	$                       300.00	$                 380.00	$             225.00
	Variable cost per unit	$                       160.00	$                 170.00	$               75.00
	Contribution margin per unit	$                       140.00	$                 210.00	$             150.00
	Plastic injection molding time	7	6	4
	Contribution margin per minute	$                         20.00	$                   35.00	$               37.50
Part 1.b	Since the Contribution margin per minute of Finish Guard is highest, Hence it is the most profitable
Part 1.c	Since the Contribution margin per minute of Ski Guard is lowest, Hence it is the least profitable
Part 3	If Plastic pellets is constraint
		Ski Guard	Golf Guard	Finishing Guard
	Selling Price per unit	$                       300.00	$                 380.00	$             225.00
	Variable cost per unit	$                       160.00	$                 170.00	$               75.00
	Contribution margin per unit	$                       140.00	$                 210.00	$             150.00
	pound of Plastic Pellets per unit	11	13	6
	Contribution margin per minute	$                         12.73	$                   16.15	$               25.00
Part 2.b	Since the Contribution margin per pound of Finishing Guard is highest, Hence it is the most profitable
Part 2.c	Since the Contribution margin per pound of Ski Guard is lowest, Hence it is the least profitable
Part 3	Contribution margin per unit of Golf Guard is highest