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12 Saved Help Save & Exi Chee Problem 12-25 Volume Trade-Off Decisions [L012-5,L012-6] The Walton Toy Company manufactures a lne 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: Demand Next Selling year Price Product Debbie Trish Sarah Mike Seving kit 74,000 $25.50 5.10 66,000 5.20 2.00 $10.04 40,000 $17.00 .40 349,000 $10.40 5.60 Direat Direct (unita) per Unit Materials Labor 3.85 5 1.12 5 5.95 4.55 0.77 59,000 $33.00 The following additional information is available: a. The company's plant has a capacity of 152,800 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all flive products b. The direct labor rate of $7 per hour is expected to remain unchanged during the coming year. c. Flxed manufacturing costs total $625,000 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? 4. Assuming that direct labor-hours Is the company's constraining resource, what is the highest total contribution marg K Prev 6 of 7 Next>