Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E: (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data table Contribution margin per unit A B 1 Per Unit = Contribution margin per machine hour 2 Model 9 Model 14 3 Selling price $ 110.00 $ 75.00 4 Costs Requirements 5 25.000 16.00 Direct material Variable direct manufacturing labor 6 14.00 21.00 Which product should the company produce? Briefly explain your answer. 7 26.00 13.00 8 Variable manufacturing overhead Fixed manufacturing overhead* Marketing (all variable) 8.50 4.25 9 17.00 9.00 Print Done 10 Total costs 90.50 63.25 19.50 $ 11.75 HL 11 Operating income $ 12 *Allocated on the basis of machine-hours Clear all Check answer Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E: (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data table Contribution margin per unit A B 1 Per Unit = Contribution margin per machine hour 2 Model 9 Model 14 3 Selling price $ 110.00 $ 75.00 4 Costs Requirements 5 25.000 16.00 Direct material Variable direct manufacturing labor 6 14.00 21.00 Which product should the company produce? Briefly explain your answer. 7 26.00 13.00 8 Variable manufacturing overhead Fixed manufacturing overhead* Marketing (all variable) 8.50 4.25 9 17.00 9.00 Print Done 10 Total costs 90.50 63.25 19.50 $ 11.75 HL 11 Operating income $ 12 *Allocated on the basis of machine-hours Clear all Check
