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?

       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	14	minutes	13	minutes	11	minutes
Contribution margin per unit of the constrained resource	$10.00	per minute	$8.46	per minute	$5.45	per minute

1b.	Which product would be the most profitable use of this constraint?

 	Ski Guard correct


1c.	Which product would be the least profitable use of this constraint?

 	Fishing Guard correct


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?


 Selling price per unit	$250	$320	$215
Variable cost per unit	110	210	155
Contribution margin per unit	$140	$110	$60
Pounds of plastic pellets required to produce one unit	9	pounds	10	pounds	14	pounds
Contribution margin per unit of the constrained resource	$15.56	per pound	$11.00	per pound	$4.29	per pound

2b.	Which product would be the most profitable use of this constraint?

 	Ski Guard correct


2c.	Which product would be the least profitable use of this constraint?

 	Fishing Guard correct


3.	Which product has the largest unit contribution margin?

 	Ski Guard correct