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: Selling Demand Next Price per year (units) 64,000 56,000 49,000 45,600 339,000 Direct Materials Direct Labor $ 4.10 $ 2.50 $ 8.54 $ 3.40 $ 4.60 Product Unit $ 22.00 $ 8.00 $ 38.50 $ 13.00 $ 9.40 $ 3.20 $ 1.04 $ 5.60 $ 4.00 $ 0.64 Debbie Trish Sarah Mike Sewing kit The following additional information is available: a. The company's plant has a capacity of 105,700 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 $8 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $525,000 per year. Variable overhead costs are $5 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: Selling Demand Next Price per year (units) 64,000 56,000 49,000 45,600 339,000 Direct Materials Direct Labor $ 4.10 $ 2.50 $ 8.54 $ 3.40 $ 4.60 Product Unit $ 22.00 $ 8.00 $ 38.50 $ 13.00 $ 9.40 $ 3.20 $ 1.04 $ 5.60 $ 4.00 $ 0.64 Debbie Trish Sarah Mike Sewing kit The following additional information is available: a. The company's plant has a capacity of 105,700 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 $8 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $525,000 per year. Variable overhead costs are $5 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?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter14: The Balanced Scorecard And Corporate Social Responsibility
Section: Chapter Questions
Problem 5E
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