The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls 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 (units) 57,000 49,000 42,000 45,500 332,000 Selling Price per Unit $23.00 $ 7.00 $41.00 $10.00 $ 8.70 Direct Materials $5.00 $1.80 $7.49 $2.70 $3.90 Direct Labor $1.50 $0.60 $3.00 $2.00 $0.35 Product Debbie Trish Sarah Mike Sewing kit The following additional information is available: a. The company's plant has a capacity of 80,520 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 $5 per hour is expected to remain unchanged during the coming year. c. Fixed costs total $590,000 per year. Variable overhead costs are $2 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. Required: 1. Determine the contribution margin per direct labor-hour expended on each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Contribution Product Margin per DLH Debbie Trish Sarah Mike Sewing kit 2. Calculate the the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year. (Do not round intermediate calculations.) Product Total Hours Debbie
The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls 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 (units) 57,000 49,000 42,000 45,500 332,000 Selling Price per Unit $23.00 $ 7.00 $41.00 $10.00 $ 8.70 Direct Materials $5.00 $1.80 $7.49 $2.70 $3.90 Direct Labor $1.50 $0.60 $3.00 $2.00 $0.35 Product Debbie Trish Sarah Mike Sewing kit The following additional information is available: a. The company's plant has a capacity of 80,520 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 $5 per hour is expected to remain unchanged during the coming year. c. Fixed costs total $590,000 per year. Variable overhead costs are $2 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. Required: 1. Determine the contribution margin per direct labor-hour expended on each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Contribution Product Margin per DLH Debbie Trish Sarah Mike Sewing kit 2. Calculate the the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year. (Do not round intermediate calculations.) Product Total Hours Debbie
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I would like some help solving this accounting problem. Screen shots for the problem are included. Thank you
Transcribed Image Text:The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls 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
(units)
57,000
49,000
42,000
45,500
332,000
Selling
Price
per Unit
$23.00
$ 7.00
$41.00
$10.00
$ 8.70
Direct
Materials
$5.00
$1.80
$7.49
$2.70
$3.90
Direct
Labor
$1.50
$0.60
$3.00
$2.00
$0.35
Product
Debbie
Trish
Sarah
Mike
Sewing kit
The following additional information is available:
a. The company's plant has a capacity of 80,520 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 $5 per hour is expected to remain unchanged during the coming year.
c. Fixed costs total $590,000 per year. Variable overhead costs are $2 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.
Required:
1. Determine the contribution margin per direct labor-hour expended on each product. (Do not round
intermediate calculations. Round your answers to 2 decimal places.)
Contribution
Product
Margin per
DLH
Debbie
Trish
Sarah
Mike
Sewing kit
2. Calculate the the total direct labor-hours that will be required to produce the units estimated to be sold
during the coming year. (Do not round intermediate calculations.)
Product
Total Hours
Debbie
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