Marwick 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 $50 $60 Direct materials 20 12 Direct labor 6 12 Variable overhead 3 6 Fixed overhead 5 10 Profit per unit $16 $20 Unit sales demand 5,000 8,000 Machine hours per unit 0.75 1.5 (a) Correct answer icon Your 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 Assistance Used Attempts: unlimited (b) Correct answer icon Your answer is correct. How should Sarah allocate the 10,500 available machine hours between the two products so that Marwick 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: unlimited (c) Correct answer icon Your answer is correct. What total contribution margin will Marwick realize based on your answer to part (b)? Total contribution margin $enter the total contribution margin in dollars eTextbook and Media Attempts: unlimited
Marwick 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 $50 $60 Direct materials 20 12 Direct labor 6 12 Variable overhead 3 6 Fixed overhead 5 10 Profit per unit $16 $20 Unit sales demand 5,000 8,000 Machine hours per unit 0.75 1.5 (a) Correct answer icon Your 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 Assistance Used Attempts: unlimited (b) Correct answer icon Your answer is correct. How should Sarah allocate the 10,500 available machine hours between the two products so that Marwick 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: unlimited (c) Correct answer icon Your answer is correct. What total contribution margin will Marwick realize based on your answer to part (b)? Total contribution margin $enter the total contribution margin in dollars eTextbook and Media Attempts: unlimited
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Marwick 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:
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
|
$50 | $60 | ||||||
|
Direct materials
|
20 | 12 | ||||||
|
Direct labor
|
6 | 12 | ||||||
|
Variable overhead
|
3 | 6 | ||||||
|
Fixed overhead
|
5 | 10 | ||||||
|
Profit per unit
|
$16 | $20 | ||||||
|
Unit sales demand
|
5,000 | 8,000 | ||||||
|
Machine hours per unit
|
0.75 | 1.5 |
(a)
Correct answer icon
Your 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
Assistance Used
Attempts: unlimited
(b)
Correct answer icon
Your answer is correct.
How should Sarah allocate the 10,500 available machine hours between the two products so that Marwick 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: unlimited
(c)
Correct answer icon
Your answer is correct.
What total contribution margin will Marwick realize based on your answer to part (b)?
| Total contribution margin | $enter the total contribution margin in dollars |
eTextbook and Media
Attempts: unlimited
(d1)
New attempt is in progress. Some of the new entries may impact the last attempt grading.
Your answer is incorrect.
Sarah has talked with the marketing department about the situation and suggested that the company raise the sales price on the weight bench to $75 to reduce customer demand. The marketing department believes that at the higher price, demand for the weight bench will drop to 5,800 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 |
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