Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance Assets Cash 127,000 $ 130, 000 Accounts receivable 333,000 473, 000 Inventory 566,000 473, 000 Plant and equipment, net 854, 000 844, 000 Investment in Buisson, S.A. 408, 000 431, 000 Land (undeveloped) 251, 000 246,000 Total assets $ 2,539,000 $ 2,597,000 Liabilities and Stockholders' Equity Accounts payable 380, 000 $ 336,000 Long-term debt 976,000 976,000 Stockholders' equity 1, 183,000 1,285,000 Total liabilities and stockholders' equity $ 2,539,000 $ 2,597,000 Joel de Paris, Inc. Income Statement Sales $ 5,130,000 Operating expenses 63, 100 Net operating income 666, 900 Interest and taxes: Interest expense $ 110, 000 Tax expense 208, 000 318,000 Net income $ 348,900 The company paid dividends of $246,900 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%. Required: 1. Compute the company's average operating assets for last year. 2. Using the formula in the Chapter 11, Compute the company's margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company's residual income last year? Average operating assets Margin % Turnover RO 3. Residual incomeThe Walton Toy Company manufactures a line 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 Direct Direct Product (units) per Unit Materials Labor Debbie 60,000 $19.50 $5.30 $2.80 Trish 52, 000 $ 6.00 $2. 10 $7.94 $ 1.20 Sarah 45, 000 $33.00 $5.20 Mike 52,000 $13.00 $3.00 $3.60 Sewing kit 335, 000 $ 9.00 $4. 20 $0.80 The following additional information is available: a. The company's plant has a capacity of 103,250 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 manufacturing costs total $620,000 per year. Variable overhead costs are $5 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 margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 103,250 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would 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 How many direct labor hours are used to manufacture one unit of each of the company's five products? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Debbie Trish Sarah Mike Sewing Kit Direct labor hours per unit
