Problem 7-25 Utilization of a Constrained Resource [LO7-5,LO7-6] The Walton Toy Company manufactures a line of dolls and adoll dress sewing kit. Demand for the dolls is increasing, andmanagement requests assistance from you in determining aneconomical sales and production mix for the coming year. Thecompany has provided the following data:

Product	DemandNext Year	SellingPrice Per Unit	DirectMaterials	Directlabor
Debbie	50,000.00	$13.50	$4.30	$3.20
Trish	42,000.00	$5.50	$1.10	$2.00
Sarah	35,000.00	$21.00	$6.44	$5.60
Mike	40,000.00	$10.00	$2.00	$4.00
Sweing Kit	325,000.00	$8.00	$3.20	$1.60

The following additional information is available: The company’splant has a capacity of 100,400 direct labor-hours per year on asingle-shift basis. The company’s present employees and equipmentcan produce all five products. The direct labor rate of $10 perhour is expected to remain unchanged during the coming year. Fixedcosts total $575,000 per year. Variable overhead costs are $2 perdirect labor-hour. All of the company's nonmanufacturing costs arefixed. The company’s finished goods inventory is negligible and canbe ignored. Required: 1. Determine the contribution margin perdirect labor-hour expended on each product. (Do not roundintermediate calculations. Round your answers to 2 decimal places.)2. Calculate the the total direct labor-hours that will be requiredto produce the units estimated to be sold during the coming year.(Do not round intermediate calculations.) 3. Based on response toRequirement 1 & 2, how much of 100,400 direct labor hours ofcapacity will be allocated to Walton Toy Company’s variousproducts? 4. What is the highest total contribution margin that thecompany can earn if it makes optimal use of its constrainedresource? 5. What is the highest price, in terms of a rate perhour, that Walton Toy Company would be willing to pay foradditional capacity (that is, for added direct labor time)? (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)