Brik, located in San Antonio, Texas, produces two lines of electric toothbrushes: deluxe and standard. Because Brik can sell all the toothbrushes 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 4,900 machine hours per month. The plant can manufacture either 65 standard electric toothbrushes or 27 deluxe electric toothbrushes per machine hour.
Requirements
1. Identify the constraining factor for Brik.
2. Prepare an analysis to show which product line the company should emphasize?

Transcribed Image Text:

Per Unit Deluxe Standard Toothbrush Toothbrush Sales price %24 88 54 Variable expense 18 22 Contribution margin 24 66 36 Contribution margin ratio 75.0% 66.7%