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Soft and Cuddly Friends {SCF} produces soft dolls. Demand forthe dolls is increasing, and management wants you to identify an economical sales and production mix
Soft and Cuddly Friends {SCF} produces soft dolls. Demand forthe 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 Best}! Lovey Demand (units) 98,666 74,866 63,699 ?2,686 128,666 Price per unit $ 51.66 $ 44.66 $ 41.99 $ 2T.99 5 3?.69 Variable costs: Direct materials 5.96 6.16 9.99 7.99 5.79 Direct labour\" ?.66 4.?5 13.381 9.53 3.36 The following additional information is available: a. The company's plant has a capacity of 130,000 direct labour-hours per year on a singleshift basis. The company's present employees and equipment can produce all five products. b. The direct labour rate is $19 per hour: this rate is expected to remain unchanged during the coming year. c. Fixed manufacturing costs amount to $880000 per year. Variable overhead costs are $9 per direct labourhour. d. All of the company's sales and administrative costs are fixed. Required: 1. Hov.r many total direct labourhours will be required to produce the units estimated to be sold during the coming year? Show your computations. {Round your answers to 2 decimal placesJ S ofty Friendly 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.) Friendly.r 1 Keeping in mind the direct la pourhour 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 decimal places} 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 lie, for added direct labour time)?
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