Question: Exercise Planet, Inc., produces two basic types of weight-ifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view

Exercise Planet, Inc., produces two basic types of weight-ifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view the data) The weight-lifting craze suggests that Exercise Planet 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. (Enter the amounts to the nearest cent.) Model 9 Model 14 Data Table margin per unit Per Unit 9 Model 14 S 130.00 $80.00 Contribution margin per machine hour Selling price Costs Exercise Planet, Inc. should produce: Direct material 25.00 1.00 OA. Model 14, since this model results in the higher contribution margin per unit. B. Model 14, since this mode results in the higher operating income per unit. C. Both Model 9 and Model 14 since both models provide positive contribution margins. Variable direct manufacturing labor 20.00 28.00 10.00 Variable manufacturing overhead 20.00 O D. Model 9, since this model results in the higher contribution margin per machine hour. 2.50 Fixed manufacturing overhead" 5.00 16.00 8.00 Marketing (all variable) 86.00 59.50 Total costs 44.00 $ 20.50 Operating income Allocated on the basis of machine-hours Choose from any list or enter any number in the input fields and then continue to the next Print Done
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
