Chad Davis, vice president for operations at C&C Sports, is considering different strategies for managing the company's inventory. Earlier in the year, the company implemented a more systematic production schedule so that at the end of each month Finished Goods Inventory is 25% of the next month's anticipated sales. That strategy freed a lot of inventory space and improved the company's cash flow. However, Chad noticed that because of the seasonal nature of the purchases of all of the products, especially award jackets, the need for direct labor hours fluctuated widely from one month to the next. Even though Chad is able to hire workers as needed, he is concerned that eventually he won't be able to find skilled workers unless they are promised a more consistent schedule. For C&C Sports, labor and sewing machines are constrained resources. The company can produce as many of their products as they have people to make them. Chad gathered the following unit sales and cost information about each product. Pants Jerseys Jackets Sales price $19.00 $22.00 $175.00 Direct materials $6.00 $10.00 $58.00 Direct labor 4.00 3.20 24.00 Variable overhead 2.20 1.7 13.20 Fixed overhead 2.80 2.24 16.80 Total cost $15.00 $17.20 $112 00 Gross profit $4.00 $4.80 $63.00 Direct labor hours 25 20 1.50 EXHIBIT 5.5 C&C Sports' sales forecast. B C E F G K M N 1 C&C Sports 2 Sales Forecast 2021 3 4 Jan Feb Mar Apr May June July AUE Sep Oct Now Dec Annual 5 Baseball pants 38,000 20,000 12,000 12,000 12,000 16,000 8,000 6,000 6,000 10,000 20,000 40,000 200,000 6 Baseball jerseys| 12,000 9,000 5,000 4,000 6,000 3,000 2,DO0 2,000 2,DO0 4,000 6,000 15,000 70,000 7 Award jackets 1,000 5,000 3,000 0 1,000 5,000 3,000 18,000 EXHIBIT 5.13 C&C Sports C&C Sports' direct labor budget- 2021 4th Quarter Direct Labor Budget - All Products all products. October November December 4th Quarter 5 Baseball pants (Exhibit 5-12] 3,125 6,250 9,875 19,250 6 Baseball jerseys 900 1.650 2.850 5,400 7 Award jackets 3,000 6,750 3,375 13,125 B Total direct labor hours required 7,025 14,650 16,100 37,775 9 Standard average wage rate S 16.00 5 16.00 $ 16.00 $ 16.00 Flows to buderted 10 Budgeted direct labor cost 112400 $ 234,400 $ 257,600 $ 604,400 COBS in ending Inventory budget Flows to cash budget Claire Elliot, vice president for finance and administration, reminded him that a commission of 5% of the sales price and shipping costs of $0.40 per item should also be considered when analyzing different strategies.(a) Your answer is correct. Calculate the contribution margin per unit for each product. (Round answers to 2 decimal places, e.g. 52.75.) Contribution margin Pants 5.45 Jerseys 5.54 $ Jackets 70.65 eTextbook and Media Attempts: unlimited (b) Your answer is correct. Calculate the contribution margin per direct labor hour for each product. (Round answers to 2 decimal places, e.g. 52.75.) Contribution margin Pants 21.80 Jerseys $ 27.70 $ Jackets 47.10 eTextbook and Media Attempts: unlimited(c) V Your answer is correct. If demand wasn't an issue, what preference order should be given to producing each of the products? 1 Jackets 2 Jerseys Pants eTextbook and Media Attempts: unlimited (d1) If the sales mix continues as budgeted in 2021-200.000 pants, 70,000 jerseys, and 18.000 jackets-howmany direct labor hours will be needed to produce these units? Direct labor hours Pants DLH Jerseys DLH LH Jackets DLHg X Your answer is incorrect. If the sales mix continues 25 budgeted in 2021200,000 pants, 70,000 jerseys, and 18,000 jacketshow many direct labor hours will b2 needed to produce these units? Direct labor hours