The Walton 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 an economical sales and production mix for the coming year. The company has provided the following data:

Product	Demand Next year (units)	Selling Price per Unit	Direct Materials	Direct Labor
Debbie	73,000	$25.00	$5.00	$3.50
Trish	65,000	$ 6.00	$1.90	$1.05
Sarah	58,000	$32.50	$9.89	$5.60
Mike	37,000	$16.00	$4.30	$4.20
Sewing kit	348,000	$ 10.30	$5.50	$0.70

The following additional information is available:

a.	The companys plant has a capacity of 138,550 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 $7 per hour is expected to remain unchanged during the coming year.
c.	Fixed costs total $615,000 per year. Variable overhead costs are $2 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.

5.	What is the highest price, in terms of a rate per hour, that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Highest price

per hour

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