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 Selling Next year Price Direct Direct Product (units) per Unit $ 26.00 $ 7.50 $ 41.50 $ 11.ee $ 8.80 Materials Labor $ 2.10 $ 8.78 $ 3.90 $ 2.70 $ 8.48 Debbie 58, e00 $5.10 Trish 5e, e00 $1.90 Sarah $7.64 43,000 48,000 333, еее Mike $2.80 Sewing kit $4.00 The following additional Information Is available: a. The company's plant has a capacity of 92,190 direct labor-hours per year on a single-shift basis. The company's present employees and equlpment can produce all five products. b. The direct labor rate of $6 per hour Is expected to remaln unchanged during the coming year. c. Fixed manufacturing costs total $600,000 per year. Varlable overhead costs are $3 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. Requlred: 1. How many direct labor hours are used to manufacture one unit of each of the company's five products? 2 How much varlable overhead cost Is Incurred to manufacture one unit of each of the company's five products? 3. What is the contributlon margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours Is the company's constralning resource, what Is the highest total contribution marglin that the company can earn if it makes optimal use of Its constralned resource? 5. Assuming that the company has made optimal use of Its 92,190 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 by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 How many direct labor hours are used to manufacture one unit of each of the company's five products? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Debbie Trish Sarah Mike Sewing Kit Direct labor hours per unit < Required 1 Required 2 >
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 Selling Next year Price Direct Direct Product (units) per Unit $ 26.00 $ 7.50 $ 41.50 $ 11.ee $ 8.80 Materials Labor $ 2.10 $ 8.78 $ 3.90 $ 2.70 $ 8.48 Debbie 58, e00 $5.10 Trish 5e, e00 $1.90 Sarah $7.64 43,000 48,000 333, еее Mike $2.80 Sewing kit $4.00 The following additional Information Is available: a. The company's plant has a capacity of 92,190 direct labor-hours per year on a single-shift basis. The company's present employees and equlpment can produce all five products. b. The direct labor rate of $6 per hour Is expected to remaln unchanged during the coming year. c. Fixed manufacturing costs total $600,000 per year. Varlable overhead costs are $3 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. Requlred: 1. How many direct labor hours are used to manufacture one unit of each of the company's five products? 2 How much varlable overhead cost Is Incurred to manufacture one unit of each of the company's five products? 3. What is the contributlon margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours Is the company's constralning resource, what Is the highest total contribution marglin that the company can earn if it makes optimal use of Its constralned resource? 5. Assuming that the company has made optimal use of Its 92,190 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 by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 How many direct labor hours are used to manufacture one unit of each of the company's five products? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Debbie Trish Sarah Mike Sewing Kit Direct labor hours per unit < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education