Agee Products, located in Peoria, Arizona, produces two lines of electric toothbrushes:
Deluxe and Standard. Because Agee can sell all of the toothbrushes it produces, 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 4,700 machine hours per month. The plant can manufacture either 56 Standard electric toothbrushes or 28 Deluxe electric toothbrushes per machine hour.
Requirements
1. Identify the constraining factor for Agee Products.
2. Prepare an analysis to show which product line to emphasize.

Transcribed Image Text:

Per Unit Deluxe Toothbrush Toothbrush $90 Standard Sales price . Variable expenses.. Contribution margin.. Contribution margin ratio $46 19 17 $73 81.1% $27 58.7%