2. Keeping in mind the direct labour-hour capacity, what should be the company's product mix for the upcoming year? Prepare a schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)
2. Keeping in mind the direct labour-hour capacity, what should be the company's product mix for the upcoming year? Prepare a schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5TIF
Related questions
Question
do not give solution in image format
![Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls is increasing, and management wants you to identify an
economical sales and production mix for the coming year. The following Information is available:
Demand (units)
Price per unit
Variable costs:
Direct materials.
Direct labour
Softy
75,000
$ 28.50
13.25
6.00
Friendly
62,800
$ 13.50
5.25
3.75
The following additional Information is available:
Goody
52,500
$ 44.50
18.60
10.50
Besty
60,000
$22.50
7.50
7.50
Lovey
187,000
18.50
$
10.50
3.00
a. The company's plant has a capacity of 110,000 direct labour-hours per year on a single-shift basis. The company's present
employees and equipment can produce all five products.
b. The direct labour rate is $15 per hour, this rate is expected to remain unchanged during the coming year
c. Fixed manufacturing costs amount to $730,000 per year. Varlable overhead costs are $6 per direct labour-hour.
d. All of the company's sales and administrative costs are fixed.
Required:
1. How many total direct labour-hours will be required to produce the units estimated to be sold during the coming year? Show your
computations. (Round your answers to 2 decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7f0a31e-149e-4057-91bc-41e0ddd41717%2F2a580db3-14dd-4258-b82b-166677718fa3%2F15j0449_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Soft and Cuddly Friends (SCF) produces soft dolls. Demand for the dolls is increasing, and management wants you to identify an
economical sales and production mix for the coming year. The following Information is available:
Demand (units)
Price per unit
Variable costs:
Direct materials.
Direct labour
Softy
75,000
$ 28.50
13.25
6.00
Friendly
62,800
$ 13.50
5.25
3.75
The following additional Information is available:
Goody
52,500
$ 44.50
18.60
10.50
Besty
60,000
$22.50
7.50
7.50
Lovey
187,000
18.50
$
10.50
3.00
a. The company's plant has a capacity of 110,000 direct labour-hours per year on a single-shift basis. The company's present
employees and equipment can produce all five products.
b. The direct labour rate is $15 per hour, this rate is expected to remain unchanged during the coming year
c. Fixed manufacturing costs amount to $730,000 per year. Varlable overhead costs are $6 per direct labour-hour.
d. All of the company's sales and administrative costs are fixed.
Required:
1. How many total direct labour-hours will be required to produce the units estimated to be sold during the coming year? Show your
computations. (Round your answers to 2 decimal places.)
![Required:
1. How many total direct labour-hours will be required to produce the units estimated to be sold during the coming year? Show your
computations. (Round your answers to 2 decimal places.)
Softy
Friendly
Goody
Besty
Lovey
Answer is complete and correct.
DLH Per
Unit
Show Transcribed Text
0.40
0.25
0.70
0.50
0.20
Product
2. Keeping in mind the direct labour-hour capacity, what should be the company's product mix for the upcoming year? Prepare a
schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)
Softy
Friendly
Goody
Besty
Lovey
Total hours required
Answer is complete but not entirely correct.
Estimated
Sales
(Units)
Show Transcribed Text
Direct Labour-
Hour Per Unit
0.40 hours
0.25 hours
0.70
hours
hours
hours
3
0.50
0.20
Answer is complete but not entirely correct.
Highest price per hour S
21
76,000
63.600 x
53,200
60,800 x
108,400 x
Total
Hours
30,400 X
15,900
37,240
30.400 X
21.680 X
135,620 x
3. What is the highest price, in terms of a rate per hour, that SCF would be willing to pay for additional capacity (Le., for added direct
labour time)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7f0a31e-149e-4057-91bc-41e0ddd41717%2F2a580db3-14dd-4258-b82b-166677718fa3%2Fzbb263_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
1. How many total direct labour-hours will be required to produce the units estimated to be sold during the coming year? Show your
computations. (Round your answers to 2 decimal places.)
Softy
Friendly
Goody
Besty
Lovey
Answer is complete and correct.
DLH Per
Unit
Show Transcribed Text
0.40
0.25
0.70
0.50
0.20
Product
2. Keeping in mind the direct labour-hour capacity, what should be the company's product mix for the upcoming year? Prepare a
schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)
Softy
Friendly
Goody
Besty
Lovey
Total hours required
Answer is complete but not entirely correct.
Estimated
Sales
(Units)
Show Transcribed Text
Direct Labour-
Hour Per Unit
0.40 hours
0.25 hours
0.70
hours
hours
hours
3
0.50
0.20
Answer is complete but not entirely correct.
Highest price per hour S
21
76,000
63.600 x
53,200
60,800 x
108,400 x
Total
Hours
30,400 X
15,900
37,240
30.400 X
21.680 X
135,620 x
3. What is the highest price, in terms of a rate per hour, that SCF would be willing to pay for additional capacity (Le., for added direct
labour time)?
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