PROBLEM 11-25 Volume Trade-Off Decisions LO11-5, LO11-6 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 Direct Product Year (units) per Unit Materials Labor 50,000$16.70 $4.30 $6.40 42.000 750 110 $4.00 35,000 $26.60 $6.44 $11.20 40,000 14.00 $200 800 Sewing kit325,000960 $320 3.20 Debbie Trish Sarah Mike 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 presemt 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 S520.000 per year. Variable overhead costs are S2 per direct labor-hour d. All of the company's nonmanufacturing costs are fixesd. e. The company's finished goods inventory is negligible and can be ignored Required 1 How many direct labor hours are used to nanufacture one unit of eactr of the company's live products 2. How much variable overhead cost is incurred to nmianufacture one unit of each of the company's five products? 3. What is the contribution margin per direct laborhour for each of the company's five products? Page 554