Answer the Following Questions Using the Information Below:
Helmer's Rockers

question 87

Multiple Choice

Answer the following questions using the information below:
Helmer's Rockers manufactures two models, Standard and Premium. Weekly demand is estimated to be 100 units of the Standard Model and 70 units of the Premium Model. The following per unit data apply:
$\begin{array}{lrr}&\text { Standard }&\text { Premium }\\\text { Contribution margin per unit } & \$ 18 & \$ 20 \\\text { Number of machine-hours required } & 3 & 4\end{array}$
-If there are 496 machine-hours available per week,how many rockers of each model should Jim Helmer produce to maximize profits?

• A) 100 units of Standard and 49 units of Premium
• B) 72 units of Standard and 70 units of Premium
• C) 100 units of Standard and 70 units of Premium
• D) 85 units of Standard and 60 units of Premium

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Definitions:

Direct Method

A cost allocation technique used in cost accounting that assigns all service department costs directly to producing departments without considering any services rendered between service departments.

Accounts Receivable

Debts to a company from its customers for products or services already delivered, yet payment is pending.

Administrative Expenses

Costs related to the general operation of a company, such as salaries of executives and office supplies.

Direct Method

A method of allocating service department costs directly to producing departments without any intermediate allocation steps.