Question 6 Planet Fit, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: Model 9 Model 14 Selling price $125.00 $65.00 Direct material 22.00 20.00 Variable direct manufacturing labor 12.00 10.00 Variable manufacturing overhead 21.00 10.50 Fixed manufacturing overhead* 8.00 4.00 Marketing (all variable) 11.00 7.00 *Note: Fixed manufacturing overhead is allocated on the basis on machine hours. The weight-lifting craze suggests that Planet Fit 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? Group of answer choices Model 14 only Model 9 only Neither Model 9 nor Model 14 Both Model 9 and Model 14
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Planet Fit, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows:
Model 9 Model 14
Selling price $125.00 $65.00
Direct material 22.00 20.00
Variable direct manufacturing labor 12.00 10.00
Variable manufacturing
Fixed manufacturing overhead* 8.00 4.00
Marketing (all variable) 11.00 7.00
*Note: Fixed manufacturing overhead is allocated on the basis on machine hours.
The weight-lifting craze suggests that Planet Fit 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?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
