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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 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench

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 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 11PA: Quality Clothing, Inc., produces skorts and jumper uniforms for schoolchildren. In the process of...
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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 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench
Transcribed Image Text: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 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench
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 Rack Bench Selling price per unit $44 $60 Direct materials 19 16 Direct labor 4 8 Variable overhead 3 6 Fixed overhead 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 Rack Bench Selling price per unit $44 $60 Direct materials 19 16 Direct labor 4 8 Variable overhead 3 6 Fixed overhead 10 Profit per unit $13 $20 Unit sales demand 5,000 8,000 Machine hours per unit 0.75 1.5
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