Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows:

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. Which product should the company produce? Briefly explain your answer.

Transcribed Image Text:

Per Unit Model AModel B $130.00 $105.00 Seling price Costs Direct material Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Marketing (all variable) 26.00 20.00 10.00 6.00 20.00 16.00 11.00 3.00 72.00 5900 Total cost Operating income Allocated on the basis of machine-hours