Question
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
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 |
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(b)
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 |
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