90.2K

Verified Solution

Link Copied!

CoursHeroTranscribedText: Refererces The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand forthe company's products is increasing. and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Demand Selling Next year Price per Direct Direct Pnoduct (units) Unit Materials Labor Debbie ?4,888 $ 25.58 $ 5.18 $ 3.35 Tr'ish 66,888 $ 5.28 $ 2.88 $ 1.12 Sarah 59,888 $ 33.88 $ 18.84 $ 5.95 Mike 8,888 $ 1?.88 $ 4.48 $ 4.55 Set-ting kit 3-9,888 $ 18.48 $ 5.68 $ 8.7"? The following additional information is available: a. The company's plant has a capacity of152,800 direct laborhours per year on a singleshift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $2 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $625,000 per year. Variable overhead costs are $3 per direct labor-hour. d. All ofthe company's nonmanufacturing costs are fixed. e. The company's finished goods inventory is negligible and can be ignored. Required: 1. How many direct labor hours are used to manufacture one unit of each ofthe company's five products? 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? 3. What is the contribution margin per direct labor-hour for each ofthe company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn ifit makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 152.800 direct labor-hours. what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity {that is, for added direct labor time]? Complete this question Irv entering your answers in the labs below. Required 1 Required 2 Required 3 Required 4 Required 5 How manyr direct labor hours are used to manufacture one unit of each of the company's ve products? [Do not round intermediate calculations. Round your answers to 2 decimal plaoes.) Required 2 >

Answer & Explanation Solved by verified expert

See Answer