Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Answer is complete but not entirely correct.Highest direct labor rate per hourRequired 4 Required 5Assuming next year the company makes optimal use of its 114,750 direct labor-hours, what is the highest direct labor rateper hour Walton Toy Company should be willing to pay for additional capacity (that is, for added direct labor time)?Note: Do not round intermediate calculations. Round your answers to 2 decimal places.114,750.00< Required 4Required 5 The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year:SellingPrice perUnit$ 17.00$ 6.50$26.00$ 12.00$8.20ProductDebbieTrishSarahMikeSewing kitDemand Nextyear (units)52,00044,00037,00040,800327,000DirectMaterials$ 4.50$ 1.30$ 6.74$ 2.20$ 3.40Direct Labor$ 2.80$ 1.40$ 4.90$ 3.50$ 1.05The following additional information is available:a. The company's plant has a capacity of 114,750 direct labor-hours per year on a single-shift basis. Each employee and piece ofequipment are capable of making all five products.b. Next year's direct labor pay rate will be $7 per hour.c. Fixed manufacturing costs total $540,000 per year. Variable overhead costs are $4 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?4. Assuming direct labor-hours is the company's constraining resource, what is the highest total contribution margin the company canearn next year if it makes optimal use of its constrained resource?5. Assuming next year the company makes optimal use of its 114,750 direct labor-hours, what is the highest direct labor rate per hourWalton Toy Company should be willing to pay for additional capacity (that is, for added direct labor time)?

Contribution margin is the profit earned for each unit sold. It is calculated by deducting variable…

Answered: The Walton Toy Company manufactures…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month. a. How many Home Office systems must be sold each month to break even on this product line? b. What will be the profit or loss for a month in which 15 Home Office systems are sold?
Ozark Metal Company makes a single product that sells for $45.5 per unit. Variable costs are $29.1 per unit, and fixed costs total $65,355 per month. Required: a. Calculate the number of units that must be sold each month for the firm to break even. b. Assume current sales are $414,000. Calculate the margin of safety and the margin of safety ratio. c. Calculate operating income if 5,300 units are sold in a month. d. Calculate operating income if the selling price is raised to $48.5 per unit, advertising expenditures are increased by $10,000 per month, and monthly unit sales volume becomes 6,000 units. e. Assume that the firm adds another product to its product line and that the new product sells for $22 per unit, has variable costs of $16 per unit, and causes fixed expenses in total to increase to $87,000 per month. Calculate the firm's operating income if 5,300 units of the original product and 4,200 units of the new product are sold each month. For the original product, use the…
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Ceder Company has compiled the following data for the upcoming year: Sales are expected to be 16,000 units at $52 each. Each unit requires 4 pounds of direct materials at $2.40 per pound. Each unit requires 2.1 hours of direct labor at $13 per hour. Manufacturing overhead is $4.90 per unit. Beginning direct materials inventory is $5,400. Ending direct materials inventory is $6,950. Selling and administrative costs totaled $138,720. Determine Ceder's budgeted cost of goods sold. Complete Ceder's budgeted income statement.
ChimneySweep provides cleaning services for residential chimneys and fireplaces. The cleaning service requires $35 in variable costs for cleaning materials. The fixed costs of labor, the company’s truck, and administrative support are $165,000 per year. ChimneySweep averages 100 service calls per month. What is the average cost per cleaning service call? Round your answer to 2 decimal places.
Gustavo Fring approached Walt & Jessie Pharmaceutical Co. to buy 50 pounds of product for $50,000 a pound. Regular customers are charged $84,000 for a pound of product. Walt and Jessie Pharmaceutical Co. has the capacity to make 1000 pounds of product per month. The following costs are associated with the company's normal monthly production of the sale of 970 pounds of product: Direct Material per Pound of Product $9,000 Direct Labor per Pound of Product $2,000 Variable MOH per Pound of Product $3,000 Fixed MOH per Pound of Product $3,000 What is the minimum price Walt and Jessie Pharmaceutical Co. would be willing to accept per pound of product for the order? Round your answer to the nearest dollar. Hint: You can solve this problem using the formula for minimum transfer price. Transfer price >= incremental variable costs per unit + (Sacrificed regular contribution margin/ # units transferred) Minimum price = incremental variable costs per unit + ((# units…
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The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Product Demand Next year (units) Selling Price per Unit Direct Materials Direct Labor Debbie 59,000 $ 30.00 $ 5.20 $ 2.10 Trish 51,000 $ 7.00 $ 2.00 $ 0.70 Sarah 44,000 $ 42.00 $ 7.79 $ 4.20 Mike 54,500 $ 12.00 $ 2.90 $ 2.80 Sewing kit 334,000 $ 8.90 $ 4.10 $ 0.35 The following additional information is available: The company’s plant has a capacity of 76,800 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. Next year’s direct labor pay rate will be $7 per hour. Fixed manufacturing costs total $610,000 per year. Variable overhead costs are $4 per direct labor-hour. All of the company’s nonmanufacturing costs are fixed. The company’s finished goods inventory is negligible and can be ignored. Required: How many direct labor-hours are used to manufacture one unit of each of the…

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