Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Brandilyn Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls is increasing, and management requests assistance

The Brandilyn Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls is increasing, and management requests assistance from you in determining the best sales and production mix for the coming year. The company has provided the following data:

image text in transcribed

a.

The companys plant has a capacity of 96,650 direct labor-hours per year on a single-shift basis. The companys present employees and equipment can produce all five products.

b. The direct labor rate of $12.00 per hour is expected to remain unchanged during the coming year.
c. Fixed costs total $366,000 per year. Variable overhead costs are $3.00 per direct labor-hour.
d. All of the company's nonmanufacturing costs are fixed.
e.

The companys finished goods inventory is negligible and can be ignored.

1.) Determine the contribution margin per direct labor-hour expended on each product.

2.) Calculate the the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year.

3.) What is the highest price, in terms of a rate per hour, that Brandilyn Toy Company should be willing to pay for additional capacity (that is, for added direct labor time)?

Demand Selling Next year Price Direct Direct (units) per Unit Materials Labor 31,000 $36.00 $3.90 $5.40 40,000 $24.00 $2.00 $2.40 49,000 $25.00 $4.70 $7.20 39,000 $21.00 $3.10 $6.00 380,000 $17.00 $1.50 $1.20 Product Marcy Tina Cari Lenny Sewing kit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

2. Why do you think we evolved three types of muscle fibers?

Answered: 1 week ago

Question

3. What are the current trends in computer hardware platforms?

Answered: 1 week ago