Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi, I keep solving this incorrectly. Please help me woth this problem! The Walton Toy Company manufactures a line of dolls and a sewing kit

Hi, I keep solving this incorrectly. Please help me woth this problem!
image text in transcribed
image text in transcribed
The 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 Price Direct Product year (units) per Unit Materials Direct Labor Debbie 50,000 $16.70 54.38 5 6.40 Trish 42,800 $. 7.50 5 1.10 $ 4.00 Sarah 35,000 5.26.60 $ 6.44 Mike 5.11.20 40,000 $14.00 $ 2.60 $ 8.00 Sewing kit 325,000 $9.60 $ 3.20 $ 3.20 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 $16 per hour is expected to remain unchanged during the coming year, c. Fixed manufacturing 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. 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 eam if it makes optimal use of its constrained resource? 5 Assuming that the company has made optimal use of its 130,000 direct lobor-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)

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_2

Step: 3

blur-text-image_3

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

Management And Cost Accounting

Authors: Charles T. Horngren, Alnoor Bhimani, Srikant M. Datar, George Foster

1st Edition

0130805475, 978-0130805478

More Books

Students also viewed these Accounting questions

Question

Distinguish between HRD and human resource management (HRM)

Answered: 1 week ago

Question

Define what the four-fifths rule is.

Answered: 1 week ago