The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the...
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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: 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? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Product Debbie Trish Sarah Mike Sewing kit Demand Next Selling Price year (units) per Unit Direct Materials Direct Labor 56,000 $ 28.50 $ 4.90 $ 4.40 48,000 $ 6.50 $ 1.70 $ 1.28 41,000 $ 40.50 $ 7.34 $ 6.80 32,000 $ 16.00 $ 2.60 $ 5.20 331,000 $ 8.60 $ 3.80 $ 0.88 Direct labor hours per unit Debbie Trish Required 1 Required 2 Required 3 Required 4 Required 5. Sarah Mike Sewing Kit The following additional information is available: a. The company's plant has a capacity of 120,140 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 $8 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $580,000 per year. Variable overhead costs are $5 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 that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 120,140 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)? How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Debbie Variable overhead cost per unit Trish Sarah Required 1 Required 2 Required 3 Required 4 Required 5 Mike Sewing Kit What is the contribution margin per direct labor-hour for each of the company's five products? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Contribution Margin per DLH Debbie Trish Required 1 Required 2 Required 3 Required 4 Required 5 Sarah Mike Sewing Kit Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? Note: Do not round intermediate calculations. Round your final answer to a whole dollar amount. Highest total contribution margin Required 1 Required 2 Required 3 Required 4 Required 5 Assuming that the company has made optimal use of its 120,140 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)? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Highest direct labor rate per hour per hour 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: 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? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Product Debbie Trish Sarah Mike Sewing kit Demand Next Selling Price year (units) per Unit Direct Materials Direct Labor 56,000 $ 28.50 $ 4.90 $ 4.40 48,000 $ 6.50 $ 1.70 $ 1.28 41,000 $ 40.50 $ 7.34 $ 6.80 32,000 $ 16.00 $ 2.60 $ 5.20 331,000 $ 8.60 $ 3.80 $ 0.88 Direct labor hours per unit Debbie Trish Required 1 Required 2 Required 3 Required 4 Required 5. Sarah Mike Sewing Kit The following additional information is available: a. The company's plant has a capacity of 120,140 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 $8 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $580,000 per year. Variable overhead costs are $5 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 that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 120,140 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)? How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Debbie Variable overhead cost per unit Trish Sarah Required 1 Required 2 Required 3 Required 4 Required 5 Mike Sewing Kit What is the contribution margin per direct labor-hour for each of the company's five products? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Contribution Margin per DLH Debbie Trish Required 1 Required 2 Required 3 Required 4 Required 5 Sarah Mike Sewing Kit Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? Note: Do not round intermediate calculations. Round your final answer to a whole dollar amount. Highest total contribution margin Required 1 Required 2 Required 3 Required 4 Required 5 Assuming that the company has made optimal use of its 120,140 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)? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Highest direct labor rate per hour per hour
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Required 1 How many direct labor hours are used to manufacture one unit of each of the companys five products To calculate the direct labor hours per unit we need to divide the total direct labor hours by the number of units produced for each product The data provided in the question is as follows Product Direct Labor Hours per Year Units Produced per Year Debbie 43800 3 Trish 41000 3 Sarah 32000 5 Mike 33800 3 Sewing Kit 331800 1 To calculate the direct labor hours per unit we divide the total direct labor hours by the units produced Debbie 43800 3 14600 direct labor hours per unit Trish 41000 3 1366667 direct labor hours per unit rounded to 2 decimal places Sarah 32000 5 6400 direct labor hours per unit Mike 33800 3 1126667 direct labor hours per unit rounded to 2 decimal places Sewing Kit 331800 1 331800 direct labor hours per unit Therefore the direct labor hours per unit for each product are as follows Debbie 14600 hours Trish 1366667 hours Sarah 6400 hours Mike 1126667 hours Sewing Kit 331800 hours Required 2 How much variable overhead cost is incurred to manufacture one unit of each of the companys five products To calculate the variable overhead cost per unit we multiply the variable overhead cost per direct labor hour ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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