Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls is increasing, and management wants you to identify an economical sales and production
Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls is increasing, and management wants you to identify an economical sales and production mix for the coming year. The following information is avallable: The following additional Information is avallable: a. The company's plant has a capacity of 110,000 direct labour-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labour rate is $15 per hour, this rate is expected to remain unchanged during the coming year. c. Fixed manufacturing costs amount to $730,000 per year. Varlable overhead costs are $6 per direct labour-hour. d. All of the company's sales and administrative costs are fixed. Requlred: Required: 1. How many total direct labour-hours will be required to produce the units estimated to be sold during the coming year? Show your computations. (Round your answers to 2 decimal places.) Answer is complete and correct. 2. Keeping In mind the direct labour-hour capacity, what should be the company's product mix for the upcoming year? Prepare a schedule in support of your recommendation. (Round "Per Unit" to 2 declmal places.) 3. What is the highest price, In terms of a rate per hour, that SCF would be willing to pay for additional capacity (i.e., for added direct labour time)? Answer is complete but not entirely correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started