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Problem 9-6 Utilizing a Constrained Resource (LO2 - CC7, 8) - EDITED Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls
Problem 9-6 Utilizing a Constrained Resource (LO2 - CC7, 8) - EDITED Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls is increasing, and management wants you to ide economical sales and production mix for the coming year. The following information is available: Demand (units) Price per unit Variable costs: Direct materials Direct labour Softy 79,000 $ 36.00 Friendly 66,000 $ 27.00 Goody 55,300 $ 25.00 Besty 63,200 $ 18.00 Lovey 112,600 $ 21.00 3.60 2.60 5.60 3.50 5.10 9.80 3.80 2.30 7.00 2.80 The following additional information is available: a. The company's plant has a capacity of 120,000 direct labour-hours per year on a single-shift basis. The company's pre employees and equipment can produce all five products. b. The direct labour rate is $14 per hour; this rate is expected to remain unchanged during the coming year. c. Fixed manufacturing costs amount to $770,000 per year. Variable overhead costs are $5 per direct labour-hour. d. All of the company's sales and administrative costs are fixed. Required: 1. How many direct labour hours per unit will be required to produce the units estimated to be sold during the coming ye computations. (Round your answers to 2 decimal places.) Softy Friendly DLH Per Unit
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