Transcribed Image Text: Problem 8-26 Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that

Transcribed Image Text: Problem 8-26
Marwick 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 6,000 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:
Weight
Bench
Dumbbell
Rack
Selling price per unit
$50
$61
Direct materials
20
15
Direct labor
4
Variable overhead
Fixed overhead
10
Profit per unit
$18
$22
Unit sales demand
4,000
7,000
Machine hours per unit
0.5
0.8 Transcribed Image Text: Sarah has talked with the marketing department about the situation and
suggested that the company raise the sales price on the weight bench to
$69 to reduce customer demand. The marketing department believes that
at the higher price, demand for the weight bench will drop to 5,800 units.
How should Sarah allocate the 6,000 machine hours based on this new
information?
Machine Hours
Weight Bench
Dumbbell rack
Sarah has talked with the marketing department about the situation and
suggested that the company raise the sales price on the weight bench to
$69 to reduce customer demand. The marketing department believes that
at the higher price, demand for the weight bench will drop to 5,800 units.
total contribution margin will Marwick earn?
Total contribution margin
$4

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadline.


Click Here to Make an Order Click Here to Hire a Writer