Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Demand for Stuffin Such stuffed animal shells and stuffing/finishing kits manufactured by RoseMarie Limited is increasing, and management requests assistance from you in determining the

Demand for Stuffin Such stuffed animal shells and stuffing/finishing kits manufactured by RoseMarie Limited is increasing, and management requests assistance from you in determining the best sales and production mix for the coming year. The company has provided the following data:

image text in transcribed

4 Demand for Stuffin Such stuffed animal shells and stuffing/finishing kits manufactured by RoseMarie Limited is increasing, and management requests assistance from you in determining the best sales and production mix for the coming year. The company has provided the following data: Demand Selling Next Year Price Direct $30 $32 $25 $27 Stuffing/finishing kits 18,500 12 Direct (units)per Unit Materials Labour S3.00 S3.50 S5.50 S7.50 S2.50 56.10 54.90 54.10 54.70 S3.10 Teddy bear Polar bear 11,000 7,000 8,000 5,000 Tiger The following additional information is available a. The company's plant has a capacity of 18,000 direct labour-hours per year on a single-shift basis. The company's current employees and equipment can produce all five products b. The direct labour rate of $10.00 per hour is expected to remain unchanged during the coming year. c. Fixed costs total $155,000 per year. Variable overhead costs are $3.00 per direct labour-hour. d. All of the company's non-manufacturing costs are fixed. e. The company's finished goods inventory is negligible and can be ignored 1. Determine the contribution margin per direct labour-hour expended on each product (the profitability index). (Do not round intermediate calculations. Round your answers to 2 decimal places.) ontribution Margin per DLH Product Teddy Polar Stuffing/finishing Kit 2. Prepare a schedule showing the total direct labour-hours that will be required to produce the units estimated to be sold during the coming year Product Total DLHs Teddy Polar Stuffing/finishing Kit Total DLHs required 3. Not available in Connect . What is the highest price, in terms of a rate per hour, that Stuffin' Such should be willing to pay for additional capacity (that is, for added direct labour time)? (Do not round intermediate calculations. Round your answers to 2 decimal places.) est price per hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Managerial Accounting For Managers

Authors: Eric Noreen, Peter C. Brewer, Ray H. Garrison

5th Edition

1260570010, 9781260570014

More Books

Students also viewed these Accounting questions