Answers will be put in Excel.

Chapter 7 akit. Demand for the PROBLEM 7-25 Utilization of a constrained Resource [LO 7-5, LO 7-6) The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Der dolls is increasing, and management requests assistance from you in determining sales and production mix for the coming year. The company has provided the following from you in determining an economie s provided the following data: Selling Price per Unit Direct Materials Direct Labor Product Demand Next Year (units) 50.000 42.000 $3.20 $2.00 Debbie Trish Sarah.. Mike Sewing kit ....... $13.50 $5.50 $21.00 $10.00 $8.00 $4.30 $1.10 $6.44 $2.00 $3.20 35,000 40,000 $5.60 $4.00 $1.60 325.000 The following additional information is available: a. The company's plant has a capacity of 130,000 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 costs total $520,000 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. Determine the contribution margin per direct labor-hour expended on each product. 2. Prepare a schedule showing the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year. 3. Examine the data you have computed in requirements 1 and 2. How would you allocate the 130,000 direct labor-hours of capacity to Walton Toy Company's various products 4. What is the highest total contribution margin that the company can earn if it makes optima use of its constrained resource? 5. What is the highest price, in terms of a rate per hour, that Walton Toy Company would willing to pay for additional capacity (that is, for added direct labor time)? 6. Assume again that the company does not want to reduce sales of any product. Identity which the company could obtain the additional output. ( A dopted)