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:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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**Instruction for Students: Calculating Machine Hours**

To determine the total number of machine hours required to produce sufficient units to satisfy the sales demand for two different products, follow these steps:

1. **Understand the Demand:**
   - Begin by identifying the sales demand for each product.

2. **Machine Hour Calculation:**
   - For each product, determine the machine hours needed to manufacture one unit.
   - Multiply the machine hours per unit by the number of units required to meet demand.

3. **Total Calculation:**
   - Add the machine hours needed for each product to find the total machine hours required.

**Input Field for Calculation:**

- **Total number of machine hours:** [Input box for students to enter their calculated total]

This exercise aims to help you practice calculating production time requirements based on sales forecasts and machine efficiency.
Transcribed Image Text:**Instruction for Students: Calculating Machine Hours** To determine the total number of machine hours required to produce sufficient units to satisfy the sales demand for two different products, follow these steps: 1. **Understand the Demand:** - Begin by identifying the sales demand for each product. 2. **Machine Hour Calculation:** - For each product, determine the machine hours needed to manufacture one unit. - Multiply the machine hours per unit by the number of units required to meet demand. 3. **Total Calculation:** - Add the machine hours needed for each product to find the total machine hours required. **Input Field for Calculation:** - **Total number of machine hours:** [Input box for students to enter their calculated total] This exercise aims to help you practice calculating production time requirements based on sales forecasts and machine efficiency.
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 Rack | Weight Bench |
|------------------|---------------|--------------|
| Selling price per unit | $44           | $60          |
| Direct materials | $19           | $16          |
| Direct labor     | $4            | $8           |
| Variable overhead| $3            | $6           |
| Fixed overhead   | $5            | $10          |
| **Profit per unit** | **$13**          | **$20**         |

- **Unit sales demand**: Dumbbell Rack - 5,000 units, Weight Bench - 8,000 units
- **Machine hours per unit**: Dumbbell Rack - 0.75 hours, Weight Bench - 1.5 hours

This data outlines the financial and production requirements for each product, aiding in the determination of how to efficiently allocate the 10,500 machine hours.
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 Rack | Weight Bench | |------------------|---------------|--------------| | Selling price per unit | $44 | $60 | | Direct materials | $19 | $16 | | Direct labor | $4 | $8 | | Variable overhead| $3 | $6 | | Fixed overhead | $5 | $10 | | **Profit per unit** | **$13** | **$20** | - **Unit sales demand**: Dumbbell Rack - 5,000 units, Weight Bench - 8,000 units - **Machine hours per unit**: Dumbbell Rack - 0.75 hours, Weight Bench - 1.5 hours This data outlines the financial and production requirements for each product, aiding in the determination of how to efficiently allocate the 10,500 machine hours.
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