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The Montrose Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls is increasing, and management requests assistance
The Montrose 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 th ing year. The company has provided the following data e com Demand Selling Next year (units) per UnitMaterials Labor 26,400 $41.00 $4.10 42,400 $34.00 $3.30 4.40 40,400 $31.00 $6.30 $11.90 46,400 $28.00 $4.70 $9.40 464,000 $27.00 $2.90 $4.50 Price Direct Direct Product $5.60 Marcy Tina Cari Lenny Sewing kit The following additional information is available a. The company's plant has a capacity of 159,600 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products b. The direct labor rate of $20 per hour is expected to remain unchanged during the coming year c. Fixed costs total $360,000 per year. Variable overhead costs are $6 per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed e. The company's finished goods inventory is negligible and can be ignored Required: 1. Determine the contribution margin per direct labor-hour expended on each product. (Round your final answers to 2 decimal places.) Contribution Product Margin per DLH Marcy Tina Cari Lenny Sewing Kit 2. Calculate the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole unit.) Product Total DLHs Marcy Tina Cari Lenny Sewing Kit Total DLHs required 4. What is the highest price, in terms of a rate per hour, that Montrose Toy Company should be willing to pay for additional capacity (that is, for added direct labor time)? (Round your intermediate calculations and final answer to 2 decimal places.) ighest price per hour
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