Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Wildhorse Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that
Wildhorse 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 company's operations manager, is preparing the production schedule for the coming month and can't 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 company's controller, has gathered the following information about the two products: Dumbbell Rack Weight Bench Selling price per unit $ 46 $ 58 Direct materials 22 14 Direct labor 4 8 Variable overhead 2 6 Fixed overhead 5 10 Profit per unit $ 13 $ 20 Unit sales demand 5,000 8,000 Machine hours per unit 0.75 1.5 (e1) After hearing about Sarah's recommendation to increase the weight bench price to $ 73, Scott Wilson, the sales manager, suggested that the company raise the price of the dumbbell rack instead. He believes that if the price is increased to $ 58, demand will fall to 4,020 units. How should Sarah allocate the 10,500 machine hours under Scott's proposal? Machine Hours Dumbbell rack Weight Bench e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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