Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

For each doll the the listed items are:

Demand next year (units)

Selling Price Per Unit

Direct Materials

Direct Labor

Debbie

54,000

$23.00

$4.70

$5.40

Trish

46,000

$ 5.00

$1.50

$1.80

Sarah

39,000

$30.00

$7.04

$8.10

Mike

30,000

$14.00

$2.40

$6.30

Sewing kit

329,000

$ 8.40

$3.60

$1.35

The following additional information is available:

  1. The company's plant has a capacity of 136,550 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products.
  2. The direct labor rate of $9 per hour is expected to remain unchanged during the coming year.
  3. Fixed costs total $560,000 per year. Variable overhead costs are $3 per direct labor-hour.
  4. All of the company's nonmanufacturing costs are fixed.
  5. 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.(Do not round intermediate calculations. Round your answers to 2 decimal places.)

2. Calculate the the total direct labor-hours that will be required to produce the units estimated to be sold during the coming year.(Do not round intermediate calculations.)

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

Payroll Accounting 2019

Authors: Jeanette Landin, Paulette Schirmer

5th edition

125991707X, 978-1259917073

More Books

Students also viewed these Accounting questions

Question

The relevance of the information to the interpreter

Answered: 1 week ago