Problem 13-25 (Algo) Volume Trede Off Decisions [LO13-5, LO13-6] The Walton Toy Company manufactures alineadolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in domining an economical sales and production mix for the coming year. The company has provided the following data: Product Debble Teis Sarah Mike Sewing kit Demand Selling Next year Price (units) per unit 72,000 $18.00 64,000 $ 6.50 57.ee $ 30.00 40,000 $15.00 347,000 $19.20 Direct Materials $4.90 $1.80 $9.74 $4.20 $5.40 Direct Labor $ 4.05 $ 1.89 5.6.75 $ 4.95 $ 1.44 The following additional Information is available: a. The company's plant has a capacity of 156110 direct labor-hours per year on a single-shift basis. The company's present employees b. The direct labor rate of $9 per hour is expected to remain unchanged during the coming year. cFixed manufacturing costs total $605.000 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 155.110 direct labor-hours. What is the highest direct labor rate per now that Wwton 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 Roti red The How many direct labor hours are used to manufacture one unit of each of the company's five products? Do not round termes calculations. Round vour antwers to 2 decimal lace Anore companys nonmancing costs are fixed. e. The company's finished goods love tory is negligible and can be ignored. Porect latxr-hour 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 mert the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 155, 110 direct labor-hours, what is the highest direct laborate 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 Required 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 Ki Direct labor hours per unit N Required 2 >
