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 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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:
Selling
Next year Price
(units) per Unit
$ 26.00
$ 7.50
$ 41.50
$ 11.00
$ 8.80
Demand
Direct
Direct
Product
Materials
Labor
$ 2.10
$ 8.78
$ 3.90
$ 2.70
$ 8.48
Debbie
58,000
5e, 000
43,000
$5.10
Trish
$1.90
Sarah
$7.64
Mike
48, 000
$2.80
Sewing kit
333,000
$4.00
The following additional Informatlon is avallable:
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 equipment 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.
Required:
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 contribution margin per direct labor-hour for each of the company's five products?
4. Assuming that direct labor-hours Is he company's constraining resource, what is the highest total contribution margln 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 >
Transcribed Image Text: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: Selling Next year Price (units) per Unit $ 26.00 $ 7.50 $ 41.50 $ 11.00 $ 8.80 Demand Direct Direct Product Materials Labor $ 2.10 $ 8.78 $ 3.90 $ 2.70 $ 8.48 Debbie 58,000 5e, 000 43,000 $5.10 Trish $1.90 Sarah $7.64 Mike 48, 000 $2.80 Sewing kit 333,000 $4.00 The following additional Informatlon is avallable: 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 equipment 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. Required: 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 contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours Is he company's constraining resource, what is the highest total contribution margln 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 >
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