Pharoah Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 10,500 machine hours, and no other products that the company makes use these machines. Sarah Jacob, the companys operations manager, is preparing the production schedule for the coming month and cant seem to find enough machine time to produce enough units to meet the customer demand that the marketing department has included in the sales budget. Michael Stoner, the companys controller, has gathered the following information about the two products:

		Dumbbell Rack				Weight Bench
Selling price per unit			$44				$58
Direct materials			21				14
Direct labor			4				8
Variable overhead			2				6
Fixed overhead			4				10
Profit per unit			$13				$20
Unit sales demand			5,000				8,000
Machine hours per unit			0.75				1.5

(a)

Correct answer iconYour answer is correct.

Calculate the total number of machine hours needed to produce enough units to meet the sales demand for the two products.

Total number of machine hours

enter the total number of machine hours

eTextbook and Media

Attempts: 1 of 3 used

(b)

Correct answer iconYour answer is correct.

How should Sarah allocate the 10,500 available machine hours between the two products so that Pharoah maximizes its profits?

		Machine Hours
Dumbbell Rack		enter a number of machine hours
Weight Bench		enter a number of machine hours

eTextbook and Media

Attempts: 1 of 3 used

(c)

Correct answer iconYour answer is correct.

What total contribution margin will Pharoah realize based on your answer to part (b)?

Total contribution margin

$enter the total contribution margin in dollars

eTextbook and Media

Attempts: 2 of 3 used

(d1)

Sarah has talked with the marketing department about the situation and suggested that the company raise the sales price on the weight bench to $64 to reduce customer demand. The marketing department believes that at the higher price, demand for the weight bench will drop to 5,920 units. How should Sarah allocate the 10,500 machine hours based on this new information?

		Machine Hours
Dumbbell rack		enter a number of machine hours
Weight Bench		enter a number of machine hours