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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 available Demand (units) Price per unit Variable costs Besty 57 ,600 27.00 12.00 43.00 21.00 Softy Friendy Goody 50,400 Lovey 102,800 17.00 72,000 60,400 Direct materials Direct labour 11.75 5.60 3.75 3.50 17.10 9.80 6.00 7.00 9.00 2.80 The following additional information is available 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 $14 per hour, this rate is expected to remain unchanged during the coming year. c. Fixed manufacturing costs amount to $700,000 per year. Variable overhead costs are $5 per direct labour-hour d. All of the company's sales and administrative costs are fixed
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