The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit.
ID: 2491839 • Letter: T
Question
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: The following additional information is available: The company's plant has a capacity of 114,750 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. The direct labor rate of $7 per hour is expected to remain unchanged during the coming year. Fixed costs total $540,000 per year. Variable overhead costs are $4 per direct labor-hour. All of the company's nonmanufacturing costs are fixed. The company's finished goods inventory is negligible and can be ignored. Required: Determine the contribution margin per direct labor-hour expended on each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 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.)Explanation / Answer
Product Selling Price Direct Material Direct Labour 20 units in how many lab hours Contribution Per 20 units Contribution margin per DLH Debbie 17.00 4.50 2.80 8.00 194.00 24.25 Trish 6.50 1.30 1.40 4.00 76.00 19.00 Sarah 26.00 6.74 4.90 14.00 287.20 20.51 Mike 12.00 2.20 3.50 10.00 126.00 12.60 SewingKit 8.20 3.40 1.05 3.00 75.00 25.00 Product Total Hours Debbie 20800 Trish 8800 Sarah 25900 Mike 10200 SewingKit 49050
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