(a) Sandhill Innovations, Inc. produces exercise and fitness gear. Two of its ne
ID: 2565843 • Letter: #
Question
(a)
Sandhill 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:
Dumbbell
Rack Weight
Bench Selling price per unit $49 $63 Direct materials 19 17 Direct labor 4 8 Variable overhead 2 6 Fixed overhead 5 10 Profit per unit $19 $22 Unit sales demand 4,000 7,000 Machine hours per unit 0.5 0.8
Explanation / Answer
Number of machine hours required = units produced * machine hours required per unit 4000*.5 + 7000*.8 7600 answer total number of machine hours 7,600 MH'S
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