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Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) of machine hours in order to calcu Model 9 Model 14 O Data Table - Contribution margin per unit B 1 Per Unit - Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price 125.00 $ 90.00 O A. Both Model 9 and Model 14 since both models provide positive contribution margins. O B. Model 14, since this model results in the higher contribution margin per machine hour. OC. Model 9, since this model results in the higher contribution margin per unit. O D. Model 9, since this model results in the higher operating income per unit. 4 Costs Direct material 29.00 16.00 Variable direct manufacturing labor 6 12.00 20.00 Variable manufacturing overhead 22.00 7 11.00 8 Fixed manufacturing overhead 12.00 6.00 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00

Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) of machine hours in order to calcu Model 9 Model 14 O Data Table - Contribution margin per unit B 1 Per Unit - Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price 125.00 $ 90.00 O A. Both Model 9 and Model 14 since both models provide positive contribution margins. O B. Model 14, since this model results in the higher contribution margin per machine hour. OC. Model 9, since this model results in the higher contribution margin per unit. O D. Model 9, since this model results in the higher operating income per unit. 4 Costs Direct material 29.00 16.00 Variable direct manufacturing labor 6 12.00 20.00 Variable manufacturing overhead 22.00 7 11.00 8 Fixed manufacturing overhead 12.00 6.00 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 i Data Table Contribution margin per unit A В C 1 Per Unit Contribution margin per machine hour 2 Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs B. Model 14, since this model results in the higher contribution margin per machine hour. Direct material 29.00 16.00 O C. Model 9, since this model results in the higher contribution margin per unit. Variable direct manufacturing 6. labor 12.00 20.00 O D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 Fixed manufacturing overhead* 12.00 6.00 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income $ 35.00 $ 26.00 12 *Allocated on the basis of machine-hours Print Done Choose from any list or enter any number in the input fields and then continue to the next question.
Transcribed Image Text:Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) The weight-lifting craze suggests that Fitness Gym can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 i Data Table Contribution margin per unit A В C 1 Per Unit Contribution margin per machine hour 2 Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs B. Model 14, since this model results in the higher contribution margin per machine hour. Direct material 29.00 16.00 O C. Model 9, since this model results in the higher contribution margin per unit. Variable direct manufacturing 6. labor 12.00 20.00 O D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 Fixed manufacturing overhead* 12.00 6.00 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income $ 35.00 $ 26.00 12 *Allocated on the basis of machine-hours Print Done Choose from any list or enter any number in the input fields and then continue to the next question.
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