Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Griswold produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Griswold could use all its available machine hours to
Griswold produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Griswold could use all its available machine hours to produce either model. The two models are processed through the same production departments. Data for both models are as follows El (Click the icon to view the data.) Read the requirements. Requirement 1. What is the constraint? Griswold's constraint is machine hours Requirement 2. Which model should Griswold produce? (Hint Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Griswold should produce the product with the highest contribution margin per unit of the constraint Now prepare the product mix analysis by starting with the contribution margin per unit. DeluxeRegular treadmill treadmill 1020580 Sale price per unit Variable costs per unit Contribution margin per unit 337 149 1357 729 Next, calculate the proportion of machine hours used Proportion of machine hours used Fixed overhead 150 Total overhead 408 136 # 3676 Deluxe Treadmill 3676| 96 Regular Treadmill 50 Finally, calculate the contribution margin per machine hour Deluxe Regular treadmill treadmill Fin Units that can be produced each machine hour Enter any number in the edit fields and then continue to the next question Griswold produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Griswold could use all its available machine hours to produce either model. The two models are processed through the same production departments. Data for both models are as follows El (Click the icon to view the data.) Read the requirements. Requirement 1. What is the constraint? Griswold's constraint is machine hours Requirement 2. Which model should Griswold produce? (Hint Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Griswold should produce the product with the highest contribution margin per unit of the constraint Now prepare the product mix analysis by starting with the contribution margin per unit. DeluxeRegular treadmill treadmill 1020580 Sale price per unit Variable costs per unit Contribution margin per unit 337 149 1357 729 Next, calculate the proportion of machine hours used Proportion of machine hours used Fixed overhead 150 Total overhead 408 136 # 3676 Deluxe Treadmill 3676| 96 Regular Treadmill 50 Finally, calculate the contribution margin per machine hour Deluxe Regular treadmill treadmill Fin Units that can be produced each machine hour Enter any number in the edit fields and then continue to the next
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started