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Please stick to question guidleines when providing help, to avoid confussion. Thanks. Problem 12-25 Utilization of a Constrained Resource [LO12-5, L012-6] The Walton Toy Company
Please stick to question guidleines when providing help, to avoid confussion. Thanks.
Problem 12-25 Utilization of a Constrained Resource [LO12-5, L012-6] The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls 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 Selling Next year Price Direct Direct Product (units) per Unit Materials Labor Debbie 66,000 $37.00 $4.30 $3.50 Trish 58,000 5.00 $1.20 $0.84 51,000 $35.50 $8.84 $5.600 Sarah 37,000 $15.00 $3.60 $4.20 Mike Sewing kit 341,000 9.60 $4.80 $0.49 The following additional information is available: a. The company's plant has a capacity of 115,730 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 $7 per hour is expected to remain unchanged during the coming year. c. Fixed costs total $545,000 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. Determine the contribution margin per direct labor-hour expended on each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Contribution Product Margin per DLH Debbie Trish Sarah Mike Sewing kit
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