Problem 13-27 (Algo) Volume Trade-Off Decisions [LO13-5, LO13-6] The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Demand Next Selling Price Product year (units) per Unit Debbie 71,000 $ 17.50 Direct Materials $ 4.80 Direct Labor $ 3.20 Trish 63,000 $ 6.00 $ 1.70 $ 1.60 Sarah 56,000 $ 31.50 $ 9.59 $ 5.60 Mike 47,600 $ 13.00 $ 4.10 $ 4.00 Sewing kit 346,000 $ 10.10 $ 5.30 $ 1.20 The following additional Information is available: a. The company's plant has a capacity of 144,000 direct labor-hours per year on a single-shift basis. Each employee and plece of equipment are capable of making all five products. b. Next year's direct labor pay rate will be $8 per hour. c. Fixed manufacturing costs total $595,000 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. 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 direct labor-hours is the company's constraining resource, what is the highest total contribution margin the company can earn next year if it makes optimal use of its constrained resource? 5. Assuming next year the company makes optimal use of its 144,000 direct labor-hours, what is the highest direct labor rate per hour Walton Toy Company should 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 Assuming direct labor-hours is the company's constraining resource, what is the highest total contribution margin the company can earn next year if it makes optimal use of its constrained resource? Note: Do not round intermediate calculations. Round your final answer to a whole dollar amount. Highest total contribution margin < Required 3 Required 5 > Problem 13-27 (Algo) Volume Trade-Off Decisions [LO13-5, LO13-6] The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Demand Next Selling Price Product year (units) per Unit Debbie 71,000 $ 17.50 Direct Materials $ 4.80 Direct Labor $ 3.20 Trish 63,000 $ 6.00 $ 1.70 $ 1.60 Sarah 56,000 $ 31.50 $ 9.59 $ 5.60 Mike Sewing kit 47,600 346,000 $ 13.00 $ 4.10 $ 4.00 $ 10.10 $ 5.30 $ 1.20 The following additional Information is available: a. The company's plant has a capacity of 144,000 direct labor-hours per year on a single-shift basis. Each employee and plece of equipment are capable of making all five products. b. Next year's direct labor pay rate will be $8 per hour. c. Fixed manufacturing costs total $595,000 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. 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 direct labor-hours is the company's constraining resource, what is the highest total contribution margin the company can earn next year if it makes optimal use of its constrained resource? 5. Assuming next year the company makes optimal use of its 144,000 direct labor-hours, what is the highest direct labor rate per hour Walton Toy Company should 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 Assuming next year the company makes optimal use of its 144,000 direct labor-hours, what is the highest direct labor rate per hour Walton Toy Company should be willing to pay for additional capacity (that is, for added direct labor time)? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Highest direct labor rate per hour < Required 4 Required 5 >