The brandilyn toy company manufactures a line of dolls and

Question # 00767056 Posted By: Georgey Updated on: 06/24/2020 12:23 PM Due on: 06/29/2020
Subject Accounting Topic Accounting Tutorials:
Question
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The Brandilyn 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 the best 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
Marcy 20,000   $33.00   $3.20    $3.60   
Tina 43,000   $28.00   $3.00    $2.40   
Cari 32,000   $24.00   $4.10    $7.80   
Lenny 43,000   $18.00   $4.00    $6.00   
Sewing kit 420,000   $14.00   $2.00    $2.40   

The following additional information is available:

        

a.

The company's plant has a capacity of 128,500 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 $12.00 per hour is expected to remain unchanged during the coming year.
c. Fixed costs total $336,000 per year. Variable overhead costs are $4.00 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.

Determine the contribution margin per direct labor-hour expended on each product

 

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