11. Your company anticipates demand for 5000 racing bike helmets at a price of $13 and 4000 commuter helmets at a price of $16. The company has a capacity of 4000 machine hours. Other information from the financial accounting system is listed below. How many racing and commuter helmets should the company make? Racing bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour Commuter bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour $5.00 $2.00 $0.42 $0.27 $7.69 $1.43 $0.68 $2.11 $9.80 $13.00 0.43 $6.54 $1.89 $1.07 $0.86 $10.36 $1.78 $0.98 $2.76 $13.12 $16.00 0.57 Make only commuter helmets with the available machine hours. O Make 1720 racing helmets and 4000 commuter helmets with the available machine hours. Make 5000 racing helmets and 3246 commuter helmets with the available machine hours. O Your company should make more commuter helmets because the profit margin per commuter helmet machine hour is higher than the profit margin per racing helmet machine hour.
11. Your company anticipates demand for 5000 racing bike helmets at a price of $13 and 4000 commuter helmets at a price of $16. The company has a capacity of 4000 machine hours. Other information from the financial accounting system is listed below. How many racing and commuter helmets should the company make? Racing bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour Commuter bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour $5.00 $2.00 $0.42 $0.27 $7.69 $1.43 $0.68 $2.11 $9.80 $13.00 0.43 $6.54 $1.89 $1.07 $0.86 $10.36 $1.78 $0.98 $2.76 $13.12 $16.00 0.57 Make only commuter helmets with the available machine hours. O Make 1720 racing helmets and 4000 commuter helmets with the available machine hours. Make 5000 racing helmets and 3246 commuter helmets with the available machine hours. O Your company should make more commuter helmets because the profit margin per commuter helmet machine hour is higher than the profit margin per racing helmet machine hour.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:11. Your company anticipates demand for 5000 racing bike helmets at a price of $13 and 4000 commuter
helmets at a price of $16. The company has a capacity of 4000 machine hours. Other information
from the financial accounting system is listed below. How many racing and commuter helmets
should the company make?
Racing bike helmet
Direct material
Direct labor
Manufacturing overhead: variable.
Non-manufacturing overhead: variable
Total variable cost
Manufacturing overhead: fixed
Non-manufacturing overhead: fixed
Total fixed cost
Total cost
Commuter helmet price
Machine hour
Commuter bike helmet
Direct material
Direct labor
Manufacturing overhead: variable.
Non-manufacturing overhead: variable
Total variable cost
Manufacturing overhead: fixed
Non-manufacturing overhead: fixed
Total fixed cost
Total cost
Commuter helmet price
Machine hour
$5.00
$2.00
$0.42
$0.27
$7.69
$1.43
$0.68
$2.11
$9.80
$13.00
0.43
$6.54
$1.89
$1.07
$0.86
$10.36
$1.78
$0.98
$2.76
$13.12
$16.00
0.57
O Make only commuter helmets with the available machine hours.
O Make 1720 racing helmets and 4000 commuter helmets with the available machine hours.
Make 5000 racing helmets and 3246 commuter helmets with the available machine hours.
Your company should make more commuter helmets because the profit margin per commuter
helmet machine hour is higher than the profit margin per racing helmet machine hour.
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