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: a. The company's plant has a capacity of 130,000 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 costs total 520,000 per year. Variable overhead costs are 2 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.
(d) 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)?

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23-08-2022
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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: a. The company's plant has a capacity of 130,000 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 costs total 520,000 per year. Variable overhead costs are 2 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.
(d) 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)?

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qwcherry qwcherry · Answer 1 · 2022-08-26T08:00:03+02:00

The Walton Toy Company manufactures a line of dolls and a doll dress kit. Demand for the dolls is increasing, and management requests assistance from you in determining a cost-effective sales and production mix for the approaching year.

The corporate has provided the subsequent data: Product Demand Next year (units) price per Unit Direct Materials Direct Labor Debbie 62,000 3 per direct labor-hour. d. The company’s finished goods inventory is negligible and may be ignored. Required: (Do not round intermediate calculations.

Round your answers to 2 decimal places.) Calculate the whole direct labor hours which will be required to provide the units estimated to be sold during the approaching year. (Do not round intermediate calculations.)

What is the best total contribution margin that the corporate can earn if it makes optimal use of its constrained resource? what's the very best price, in terms of a rate per labor hour, that Walton Toy Company would be willing to purchase additional capacity (that is, for added direct labor time)? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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