The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products 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 Debbie telah Sarah Mike Sewing kit Demand Next Selling your Price Direct (unit) per Unit Materials 62,000 $20.50 $5.50 54,000 $ 7.00 $2.30 47,000 934.00 58.24 56,000 $15.00 $3.20 337.000 $9.20 $4.40 Direct Labor $ 3.60 $ 1.32 $ 7.20 $ 4.80 90.72 The following additional information is available: 3. The company's plant has a capacity of 84160 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 $12 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $640,000 per year. Variable overhead costs are $3 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. How many direct labor hours are used to manufacture one unit of each of the company's five products? 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? 3. What is the contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 84,160 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)? Cardinal Company is considering a five-year project that would require a $3,025,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: $2,737,000 1,001,000 1,736,000 Sales Variable expenses Contribution margin Pixed expenses Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 610,000 605,000 1,215,000 $ 521,000 Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using table, Foundational 13-3 3. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amour Present value Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Coat of equipment required Working capital investment required Annual cash inflova Salvage value of equipment in six years Life of the project POE Project $135,000 $ 0 . $135,000 $ 22,000 $ 66,000 $8.400 $ 6 years 6 years The working capitai needed for project will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 17% Click here to view Exhibit:138-1 and Exhibit 138-2. to determine the appropriate discount factors) using tables. Required: 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest 2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest 3. Which investment alternative of elther) would you recommend that the company accept? 1. Net present Value project A 2. Net present value projects 3 Which investment witmative either) would you recommend that the company accept? Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 24% each of the last three years, Casey is considering a capital budgeting project that would require a $6,100,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is 20%. The project would provide net operating income each year for five years as follows: $5,400,000 2,400,000 3,000,000 Sales Variable expenses Contribution margin Pixed expenses Advertising, salaries, and other tixed out-of-pocket costs Depreciation Total fixed expenses Net operating Incone 900,000 1,220,000 2,120,000 200,000 Click here to view Exhibit 130 and Exhibit 138-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project's net present value? 2. What is the project's internal rate of return to the nearest whole percent? 3. What is the project's simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-6. Would Casey be inclined to pursue this investment opportunity? Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (Ron, which has exceeded 93% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product Products $ 480,000 Initial investments Cont of equipment (zero salvage value) Annual revenues and conta Sales revences Variable expenses Depreciation expense Fixed out-of-pocket operating conta $ 280,000 $ 330,000 $ 152,000 $ 56,000 $ 78,000 $430,000 $ 202,000 $ 96,000 $ 60,000 The company's discount rate is 14% Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product 3. Calculate the internal rate of return for each product. 4. Calculate the project profitability Index for each product. 5. Calculate the simple rate of return for each product. 6a. For each measure, identify whether Product A or Product B is preferred. 66. Based on the simple rate of return, Lou Barlow would likely: The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products 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 Debbie Teish Sarah Mike Sewing kit Demand Next Selling your Price (unit) per unit 62,000 $20.50 54.000 $ 7.00 47,000 934.00 56,000 $15.00 337.000 $ 9.20 Direct Materiale $5.50 $2.30 58.24 $3.20 $4.40 Direct Labor $ 3.60 $ 1.32 $ 7.20 $ 4.00 90.72 The following additional information is available: a. The company's plant has a capacity of 84160 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 $12 per hour is expected to remain unchanged during the coming year c. Fixed manufacturing costs total $640,000 per year. Variable overhead costs are $3 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. How many direct labor hours are used to manufacture one unit of each of the company's five products? 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? 3. What is the contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 84,160 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)