Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view

image text in transcribed
Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view the data.) The weightlifting craze suggests that Fitness Gym can sell enough of either Model S or Model 14 to keep the plant operating at full capacity. Both products are processed through the same product 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. (Enter the amounts to the nearest centi Model 125.00 Model 14 90.00 52.00 67.00 Selling price per unit Variable costs per unit - Contribution margin per unit Relative use of machine-hours per unit of product 58.00 38.00 2 29.00 38.00 - Contribution margin per machine hour Fitness Gym, Inc. should produce O A Model 9, since this model results in the higher operating income per unit. B. Both Model 9 and Model 14 since both models provide positive contribution margins OC Model 9, since this model results in the higher contribution margin per unit. D. Model 14, since this model results in the higher contribution margin per machine hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions