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	68,000	$31.00	$4.50	$4.20
Trish	60,000	$ 5.00	$1.40	$0.77
Sarah	53,000	$44.50	$9.14	$6.30
Mike	34,000	$17.00	$3.80	$4.90
Sewing kit	343,000	$ 9.80	$5.00	$0.42

The following additional information is available:

a.

The companys plant has a capacity of 127,580 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 $565,000 per year. Variable overhead costs are $5 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.

3.	Based on response to Requirement 1 & 2, how much of 127,580 direct labor hours of capacity will be allocated to Walton Toy Companys various products?

debbie

trish

sarah

mike

sewing kit

What is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource?

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.)