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: Debbie Trish Sarah Product Demand Next year (units) Mike Sewing kit Selling Price per Unit $ 21.00 $7.50 $36.50 $ 16.00 $ 9.30 63,000 55,000 48,000 48,000 338,000 The following additional information is available: Direct Materials $ 5.60 $ 2.40 $8.39 $ 3.30 $ 4.50 Direct Labor $ 4.20 $1.44 $7.80 $5.40 $ 0.84 a. The company's plant has a capacity of 94,310 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 $650,000 per year. Variable overhead costs are $4 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?
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: Debbie Trish Sarah Product Demand Next year (units) Mike Sewing kit Selling Price per Unit $ 21.00 $7.50 $36.50 $ 16.00 $ 9.30 63,000 55,000 48,000 48,000 338,000 The following additional information is available: Direct Materials $ 5.60 $ 2.40 $8.39 $ 3.30 $ 4.50 Direct Labor $ 4.20 $1.44 $7.80 $5.40 $ 0.84 a. The company's plant has a capacity of 94,310 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 $650,000 per year. Variable overhead costs are $4 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?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 84PSA
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