Question

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			Golf Guard			Fishing Guard
Selling price per unit		$250			$320			$215
Variable cost per unit		$110			$210			$155
Plastic injection molding machine processing    time required to produce one unit		14 minutes			13 minutes			11 minutes
Pounds of plastic pellets per unit		9 pounds			10 pounds			14 pounds

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? (Round your answers to 2 decimal places.)

	Ski Guard Golf Guard Fishing Guard Selling price per unit Variable cost per unit Contribution margin per unit Plastic injection molding machine processing time required to produce one unit minutes minutes minutes Contribution margin per unit of the constrained resource per minute per minute per minute

1b.	Which product would be the most profitable use of this constraint?
	Ski Guard Fishing Guard Golf Guard

1c.	Which product would be the least profitable use of this constraint?
	Ski Guard Fishing Guard Golf Guard

2a.	A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)

	Ski Guard Golf Guard Fishing Guard Selling price per unit Variable cost per unit Contribution margin per unit Pounds of plastic pellets required to produce one unit pounds pounds pounds Contribution margin per unit of the constrained resource per pound per pound per pound

2b.	Which product would be the most profitable use of this constraint?
	Ski Guard Fishing Guard Golf Guard

2c.	Which product would be the least profitable use of this constraint?
	Ski Guard Fishing Guard Golf Guard

3.	Which product has the largest unit contribution margin?
	Ski Guard Fishing Guard Golf Guard

Answer 1

1a
	Ski Guard	Golf Guard	Fishing Guard
Selling price per unit	250	320	215
Variable cost per unit	110	210	155
Contribution margin per unit	140	110	60
Plastic injection molding machine processing time required to produce one unit ( in Min )	14	13	11
Contribution margin per unit of the considered resource	10.00	8.46	5.45
1b	SKI GUARD
The most profitable product with the use of this constraint will be SKI guard with the maximum contribution margin.
				1c	fishing guard
The least profitable product would be fishing guard
2a
	Ski Guard	Golf Guard	Fishing Guard
Selling price per unit	250	320	215
Variable cost per unit	110	210	155
Contribution margin per unit	140	110	60
Pounds of plastic pallets per unit	9	10	14
Contribution margin per unit of the considered resource	15.56	11.00	4.29
2b	Ski Guard
The most profitable product with the use of this constraint will be SKi guard with the maximum contribution margin.
				2c	Fishing
The least profitable product would be Fishing guard
3) largest contribution margin Ski guard