The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: 65,000 Product Demand Next year (units) Debbie Trish Sarah Mike Sewing kit Selling Price per Unit $ 28.00 Direct Materials Direct Labor $ 4.20 $ 4.05 57,000 $ 6.00 $ 1.10 $ 1.26 50,000 $ 35.00 $ 8.69 $ 6.75 40,000 340,000 $ 14.00 $ 3.50 $ 4.95 $ 9.50 $ 4.70 $ 0.81 The following additional information is available: a. The company's plant has a capacity of 116,330 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. b. Next year's direct labor pay rate will be $9 per hour. c. Fixed manufacturing costs total $535,000 per year. Variable overhead costs are $2 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 can earn next year if it makes optimal use of its constrained resource? 5. Assuming next year the company makes optimal use of its 116,330 direct labor-hours, what is the highest direct labor rate per hour Walton Toy Company should 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 The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: 65,000 Product Demand Next year (units) Debbie Trish Sarah Mike Sewing kit Selling Price per Unit $ 28.00 Direct Materials Direct Labor $ 4.20 $ 4.05 57,000 $ 6.00 $ 1.10 $ 1.26 50,000 $ 35.00 $ 8.69 $ 6.75 40,000 340,000 $ 14.00 $ 3.50 $ 4.95 $ 9.50 $ 4.70 $ 0.81 The following additional information is available: a. The company's plant has a capacity of 116,330 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. b. Next year's direct labor pay rate will be $9 per hour. c. Fixed manufacturing costs total $535,000 per year. Variable overhead costs are $2 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 can earn next year if it makes optimal use of its constrained resource? 5. Assuming next year the company makes optimal use of its 116,330 direct labor-hours, what is the highest direct labor rate per hour Walton Toy Company should 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
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
What are incoterms rules for? Are there a contract? Depend on your answer, please explain why
-
In Research Example 11.1, you learned of a study by Wright et al. (2008) in which researchers set out to determine whether multiple homicide offenders (MHOs) were diverse in the number and types of...
-
What are the capital account and drawing account used for in a sole proprietorship? If Sam Rivera decided to set up a sole proprietorship and invest $100,000 in it on September 1, how would this be...
-
Identify each of the equations as representing either a circle, a parabola, an ellipse, a hyperbola, or none of these. (x + 1) 2 + (y + 1) 2 = 2(x + y + 1)
-
a. The trolley problem is a famous ethical puzzle created by Phillipa Foote: You are the conductor of a trolley (or subway or streetcar or train) that is heading out of control down a track. Five...
-
The chief financial officer (CFO) of Myeneke Corporation requested that the accounting department prepare a preliminary balance sheet on December 30, 2017, so that the CFO could get an idea of how...
-
Are leaders born or made? Can anyone learn to be a leader or does it require some innate qualities or characteristics of the individual?
-
Enter the following data into a spreadsheet and then perform the following tasks: a. Calculate examples of these batch totals: A has total A financial total A record count b. Assume the following...
-
5. 3.1 cm P = 3.4 cm A= 3.8 cm 3.7 cm 13 in 15 in 5 in 2 in P = A=
-
a. If Canace Company, with a break-even point at $448,000 of sales, has actual sales of $800,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the...
-
Liquid Hair Inc. has two support departments: HR and Admin. The company produces shampoo for women and shampoo for men. HR costs incurred were 35,050$ and Admin costs incurred were 30,100$. HR spent...
-
Given below are lease terms at the local dealership. What is the total cash due at signing? Terms: Length of lease = 36 months MSRP of the car = $28,900 Purchase value of the car after lease =...
-
The following transactions have been extracted from the books of Emmy's Ltd. For the month of January 2021. Record the transactions in the respective accounts, balance-off the accounts and extract a...
-
Consider a two period intertemporal choice problem. Anne earns an income of R400,000 in period 1. The interest rate available is 5% and there is a 40% tax on saving. A retirement tax subsidy is...
-
This essay assignment should focus on the important role of commercial banks in a modern economy and dynamic financial system. To do so, you will be required to conduct research on a local business...
-
Storrs Cycles has just started selling the new Cyclone mountain bike, with monthly sales as shown in the table. Month Jan Feb Mar Apr Sales 407 380 414 375 Based on the given monthly sales data, it...
-
How can you tell from the vertex form y = a(x - h) 2 + k whether a quadratic function has no real zeros?
-
The income statement of Barbra Streisand Company is shown below. Additional information: 1. Accounts receivable decreased \($280,000\) during the year. 2. Prepaid expenses increased \($150,000\)...
-
George Clooney Company's income statement for the year ended December 31 2002, contained the following condensed information. Clooney s balance sheet contained the following comparative data at...
-
The financial statements of Frank B. Robinson Company appear below. Additional information: 1. Dividends declared and paid were \($3,000\). 2. During the year equipment was sold for \($8,500\) cash....
Study smarter with the SolutionInn App