Assignment: Chapter 8 Homework 4. Containers Plus produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product is so high that the company can sell as many of each size as it can produce. The same machinery is used to produce both sizes. The machinery is available for only 3,000 hours per period. The company can produce 9 Large bins every hour compared to 17 Regular bins in the same amount of time. Fixed expenses amount to $100,000 per period, Sales prices and variable costs are as follows: (Click the icon to view the costs.) 1. Which product should Containers Plus emphasize? Why? 2. To maximize profits, how many of each size bin should the company produce? 3. Given this product mix, what will the company's operating income be? 1. Which product should Containers Plus emphasize? Why? Complete the product mix analysis to determine which product Containers Plus should emphasize. Containers Plus Product Mix Analysis Regular Large Sales price per unit Less: Variable cost per unit Contribution margin per unit Units per machine hour Contribution margin per machine hour Decision: Containers Plus should emphasize the production of (1) because the (2) is higher 2. To maximize profits, how many of each size bin should the company produce? (If there are zero machine hours allocated to a bin size, enter in the input box.) machine hours making Regular size bins and machine hours making Containers Plus should spend Large size bins. 3. Given the product mix determined in the previous step, calculate Containers Plus's operating income for the period. Number of bins per period Contribution margin per bin Total contribution margin Less: Fixed expenses Operating income 1: Data Table Regular Large Sales price per unit.......... $ 8.20 $ 10.40 Variable cost per unit ....... $ 3.20 $ 4.00 (1) O Large bins O Regular bins (2) O contribution margin per machine hour O sales price per unit