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 compan has provided the following data: Selling Price per Unit $ 15.50 $ 6.00 $ 25.00 40,000 $ 11.00 326,000 $ 8.10 The following additional information is available: Product Debbie Trish Sarah Mike Sewing kit Demand Next year (units) 51,000 43,000 36,000 Direct Materials $ 4.40 $ 1.20 $ 6.59 $ 2.10 $ 3.30 Direct Labor $ 2.70 $ 1.20 $ 4.50 $ 3.30 $ 0.90 a. The company's plant has a capacity of 118,450 direct labor-hours per year on a single-shift basis. The company's present employe and equipment can produce all five products. b. The direct labor rate of $6 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $530,000 per year. Variable overhead costs are $3 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
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 compan has provided the following data: Selling Price per Unit $ 15.50 $ 6.00 $ 25.00 40,000 $ 11.00 326,000 $ 8.10 The following additional information is available: Product Debbie Trish Sarah Mike Sewing kit Demand Next year (units) 51,000 43,000 36,000 Direct Materials $ 4.40 $ 1.20 $ 6.59 $ 2.10 $ 3.30 Direct Labor $ 2.70 $ 1.20 $ 4.50 $ 3.30 $ 0.90 a. The company's plant has a capacity of 118,450 direct labor-hours per year on a single-shift basis. The company's present employe and equipment can produce all five products. b. The direct labor rate of $6 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $530,000 per year. Variable overhead costs are $3 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
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 7CE: Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each...
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