Required 1 Required 2 Required 3 Required 4Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin thatthe company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Roundyour final answer to a whole dollar amount.)Highest total contribution marginRequired 5 The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, andmanagement requests assistance from you in determining an economical sales and production mix for the coming year. The companyhas provided the following data:Demand Next year Selling PriceProductDebbieper Unit$28.50$ 6.50Trish(units)56,00048,00041,00032,000331,000SarahMike$ 40.50$ 16.00$8.60Sewing kitThe following additional information is available:DirectMaterials$ 4.90$ 1.70$7.34$ 2.60$ 3.80DirectLabor$4.40$ 1.28$ 6.80$5.20$ 0.88a. The company's plant has a capacity of 120,140 direct labor-hours per year on a single-shift basis. The company's present employeesand equipment can produce all five products.b. The direct labor rate of $8 per hour is expected to remain unchanged during the coming year.c. Fixed manufacturing costs total $580,000 per year. Variable overhead costs are $5 per direct labor-hour.d. All of the company's nonmanufacturing costs are fixed.e. The company's finished goods inventory is negligible and can be ignored.

The contribution margin is calculated as difference between sales and variable costs. The variable…

Required 1 Required 2 Required 3 Required 4 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Round your final answer to a whole dollar amount.) Highest total contribution margin Required 5

Required 1 Required 2 Required 3 Required 4 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Round your final answer to a whole dollar amount.) Highest total contribution margin Required 5

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Required 1 Required 2 Required 3 Required 4
Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that
the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Round
your final answer to a whole dollar amount.)
Highest total contribution margin
Required 5

The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the 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 Next year Selling Price
Product
Debbie
per Unit
$28.50
$ 6.50
Trish
(units)
56,000
48,000
41,000
32,000
331,000
Sarah
Mike
$ 40.50
$ 16.00
$8.60
Sewing kit
The following additional information is available:
Direct
Materials
$ 4.90
$ 1.70
$7.34
$ 2.60
$ 3.80
Direct
Labor
$4.40
$ 1.28
$ 6.80
$5.20
$ 0.88
a. The company's plant has a capacity of 120,140 direct labor-hours per year on a single-shift basis. The company's present employees
and equipment can produce all five products.
b. The direct labor rate of $8 per hour is expected to remain unchanged during the coming year.
c. Fixed manufacturing costs total $580,000 per year. Variable overhead costs are $5 per direct labor-hour.
d. All of the company's nonmanufacturing costs are fixed.
e. The company's finished goods inventory is negligible and can be ignored.

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Step 2: Calculation of Direct labor hours per unit

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