Sarah has talked with the marketing department about the situation and suggested that the company raise the sales price on theweight bench to $75 to reduce customer demand. The marketing department believes that at the higher price, demand for theweight bench will drop to 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information?Machine HoursDumbbell rackWeight Bench Carla Vista Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only becompleted on machines that were recently purchased for this purpose. The machines have a maximum capacity of 10,500 machinehours, 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 findenough machine time to produce enough units to meet the customer demand that the marketing department has included in the salesbudget.Michael Stoner, the company's controller, has gathered the following information about the two products:DumbbellWeightRackBenchSelling price per unit$44$60Direct materials1916Direct labor48Variable overhead36Fixed overhead10Profit per unit$13$20Unit sales demand5,0008,000Machine hours per unit0.751.5

To identify the machine hour we have to firstly calculate the contribution per unit hour. then we…

Sarah has talked with the marketing department about the situation and suggested that the company raise the sales price on the weight bench to $75 to reduce customer demand. The marketing department believes that at the higher price, demand for the weight bench will drop to 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench

Sarah has talked with the marketing department about the situation and suggested that the company raise the sales price on the weight bench to $75 to reduce customer demand. The marketing department believes that at the higher price, demand for the weight bench will drop to 5,760 units. How should Sarah allocate the 10,500 machine hours based on this new information? Machine Hours Dumbbell rack Weight Bench

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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