## (Solution Download) The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the doll

 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 75,000 \$28.00 \$5.20 \$4.80 Trish 67,000 \$5.70 \$2.10 \$1.36 Sarah 60,000 \$33.50 \$10.19 \$7.20 Mike 65,000 \$18.00 \$4.50 \$5.60 Sewing Kit 350,000 \$10.50 \$5.70 \$0.96

 The following additional information is available:

 a. The companyA????1s plant has a capacity of 185,290 direct labor-hours per year on a single-shift basis. The companyA????1s present employees and equipment can produce all five products. b. The direct labor rate of \$8 per hour is expected to remain unchanged during the coming year. c. Fixed costs total \$635,000 per year. Variable overhead costs are \$4 per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed. e. The companyA????1s finished goods inventory is negligible and can be ignored.

QUESTION 1:

Determine the contribution margin per direct labor-hour expended

on each product.(Do not round intermediate calculations.

 Product Contribution Margin per DLH Debbie Trish Sarah Mike Sewing Kit

QUESTION 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.)

 Product Total Hours Debbie Trish Sarah Mike Sewing Kit Total Hours Required:

QUESTION 3:

 Based on response to Requirement 1 & 2, how much of 185,290 direct labor hours of capacity will be allocated to Walton Toy CompanyA????1s various products?

 Product Hours: Debbie Trish Sarah Mike Sewing Kit

QUESTION 4:

What is the highest total contribution margin that the company

can earn if it makes optimal use of its constrained resource?

Total Contribution Margin: ____________________

QUESTION 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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