IPond Corp. produces two lines of MP3 players: 512MB and 1GB, Because IPond can sell all the MP3 players it can produce, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data:

After expansion, the factory will have a production capacity of 4,500 machine hours per month. The plant can manufacture either 24 IPond \(1 \mathrm{~GB}\) players or 60 IPond \(512 \mathrm{MB}\) players per machine hour.

Requirements 

1. Identify the constraining factor for IPond.

2. Prepare an analysis to show which product line to emphasize.

Transcribed Image Text:

Sale price Variable expenses Contribution margin Contribution margin ratio Per Unit IPond 1 GB IPond 512 MB $90 $48 20 18 $70 $30 77.8% 62.5%