Carla Vista 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 Weight Bench Rack Selling price per unit $44 $60 Direct materials 19 16 Direct labor 4 8 Variable overhead 3 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

Principles of Accounting Volume 2
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Chapter10: Short-term Decision Making
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Carla Vista 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
Weight
Bench
Rack
Selling price per unit
$44
$60
Direct materials
19
16
Direct labor
4
8
Variable overhead
3
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
Transcribed Image Text:Carla Vista 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 Weight Bench Rack Selling price per unit $44 $60 Direct materials 19 16 Direct labor 4 8 Variable overhead 3 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
How should Sarah allocate the 10,500 available machine hours between the two products so that Carla Vista maximizes its
profits?
Machine Hours
3750
Dumbbell Rack
6750
Weight Bench
eTextbook and Media
Attempts: 2 of 3 used
(c)
Your answer is incorrect.
What total contribution margin will Carla Vista realize based on your answer to part (b)?
Total contribution margin
%24
Transcribed Image Text:How should Sarah allocate the 10,500 available machine hours between the two products so that Carla Vista maximizes its profits? Machine Hours 3750 Dumbbell Rack 6750 Weight Bench eTextbook and Media Attempts: 2 of 3 used (c) Your answer is incorrect. What total contribution margin will Carla Vista realize based on your answer to part (b)? Total contribution margin %24
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