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:

	Softy				Friendly				Goody				Besty				Lovey
Demand (units)		86,000				71,600				60,200				68,800				122,400
Price per unit	$	49.00			$	42.00			$	39.00			$	25.00			$	35.00
Variable costs:
Direct materials		4.90				4.10				7.90				5.90				3.70
Direct labour		6.00				3.75				10.50				7.50				3.00

The following additional information is available:

1. The companys plant has a capacity of 120,000 direct labour-hours per year on a single-shift basis. The companys present employees and equipment can produce all five products.
2. The direct labour rate is $15 per hour; this rate is expected to remain unchanged during the coming year.
3. Fixed manufacturing costs amount to $840,000 per year. Variable overhead costs are $6 per direct labour-hour.
4. All of the companys sales and administrative costs are fixed.

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.)

	DLH Per Unit
Softy
Friendly
Goody
Besty
Lovey

2. Keeping in mind the direct labour-hour capacity, what should be the companys product mix for the upcoming year? Prepare a schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)

Product	Direct Labour-Hour Per Unit		Estimated Sales (Units)	Total Hours
Softy		hours
Friendly		hours
Goody		hours
Besty		hours
Lovey		hours
Total hours required

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)?

Highest price per hour

4. Assume again that the company does not want to reduce sales of any product. Identify ways the company could obtain the additional output. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

• Adding another shiftunanswered
• Contracting out some work to outside suppliersunanswered
• Employing additional labour forceunanswered
• Expanding the workforceunanswered
• Eliminating wasted labour time in the production processunanswered
• Utilizing the unutilized capacityunanswered
• Working overtime