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What is the contribution margin per unit

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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

$320

$320

$275

Variable cost per unit

$110

$130

$95

Plastic injection molding machine processing time required to produce one unit

13 minutes

10 minutes

2 minutes

Ponds of plastic pellets per unit

12 pounds

7 pounds

14 pounds

Required:

1-a. The total time available on the plastic injection molding machine lathe constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard?

2-a. 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 the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard?

Reference no: EM131734246

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