The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Selling Price per Unit $ 37.00 $5.00 $ 35.50 $ 15.00 $9.60 Demand Next year (units) 66,000 58,000 Debbie Trish Sarah Mike 51,000 Sewing kit 37,000 341,000 The following additional information is available: a. The company's plant has a capacity of 115,730 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. Product Direct Materials $ 4.30 $ 1.20 $8.84 $ 3.60 $ 4.80 Direct Labor $ 3.50 $ 0.84 $5.60 $ 4.20 $ 0.49 b. Next year's direct labor pay rate will be $7 per hour. c. Fixed manufacturing costs total $545,000 per year. Variable 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 variable 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?

The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Selling Price per Unit $ 37.00 $5.00 $ 35.50 $ 15.00 $9.60 Demand Next year (units) 66,000 58,000 Debbie Trish Sarah Mike 51,000 Sewing kit 37,000 341,000 The following additional information is available: a. The company's plant has a capacity of 115,730 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. Product Direct Materials $ 4.30 $ 1.20 $8.84 $ 3.60 $ 4.80 Direct Labor $ 3.50 $ 0.84 $5.60 $ 4.20 $ 0.49 b. Next year's direct labor pay rate will be $7 per hour. c. Fixed manufacturing costs total $545,000 per year. Variable 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 variable 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?

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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