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Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) 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. 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. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data Table Contribution margin per unit %3D A B Per Unit Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 O A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs O B. Model 14, since this model results in the higher contribution margin per machine hour. 29.00 16.00 Direct material Variable direct manufacturing 5 OC. Model 9, since this model results in the contribution margin per unit. 6 labor 12.00 20.00 O D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 8 Fixed manufacturing overhead* 12.00 6.00 9 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income 2$ 35.00 S 26.00 12 *Allocated on the basis of machine-hours Print Done

Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) 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. 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. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data Table Contribution margin per unit %3D A B Per Unit Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 O A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs O B. Model 14, since this model results in the higher contribution margin per machine hour. 29.00 16.00 Direct material Variable direct manufacturing 5 OC. Model 9, since this model results in the contribution margin per unit. 6 labor 12.00 20.00 O D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 8 Fixed manufacturing overhead* 12.00 6.00 9 Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income 2$ 35.00 S 26.00 12 *Allocated on the basis of machine-hours Print Done

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) 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. 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. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data Table Contribution margin per unit A В 1 Per Unit Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs B. Model 14, since this model results in the higher contribution margin per machine hour. Direct material 29.00 16.00 C. Model 9, since this model results in the higher contribution margin per unit. Variable direct manufacturing labor 12.00 20.00 D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 8 Fixed manufacturing overhead* 12.00 6.00 9. Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income 35.00 $ 26.00 12 *Allocated on the basis of machine-hours Print Done
Transcribed Image Text:Fitness Gym, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: E (Click the icon to view the data.) 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. 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. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Data Table Contribution margin per unit A В 1 Per Unit Contribution margin per machine hour Model 9 Model 14 Fitness Gym, Inc. should produce: 3 Selling price $ 125.00 $ 90.00 A. Both Model 9 and Model 14 since both models provide positive contribution margins. 4 Costs B. Model 14, since this model results in the higher contribution margin per machine hour. Direct material 29.00 16.00 C. Model 9, since this model results in the higher contribution margin per unit. Variable direct manufacturing labor 12.00 20.00 D. Model 9, since this model results in the higher operating income per unit. 7 Variable manufacturing overhead 22.00 11.00 8 Fixed manufacturing overhead* 12.00 6.00 9. Marketing (all variable) 15.00 11.00 10 Total costs 90.00 64.00 11 Operating income 35.00 $ 26.00 12 *Allocated on the basis of machine-hours Print Done
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