a line of dols and a doll dress sewing kit. Demand for the dolls is increasing a
ID: 2585762 • Letter: A
Question
a line of dols 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: Selling Next year lunits) $4.50 $1.30 $2 20 $3.40 $17.00 6.50 2.80 44000$26.00 37,000 40,800 $4.00 327,000 8.20 The following additional information is available: a. The b. The direct labor rate of $7 per hour is expected to unchanged during the year and can be ignored $ 2025 Trish Sewing kit 21.00Explanation / Answer
Ans. Calculation of Product Mix (in $)
Step: 1 Calculation of Contribution per direct labour hours
Debbie Trish Sarah Mike Sewing kit
SP 17 6.56 26 12 8.20
Material cost 4.5 1.30 6.74 2.20 3.40
Labour cost 2.80 1.40 4.90 3.50 1.05
Variable manu. cost 1.60 .80 28 2 .60
(labour hrs X4)
contribution per unit 8.10 3 11.56 4.30 3.65
Direct labour hrs p.unit .40 .20 .70 .50 .15
Cont. per Labour hr 20.25 15 16.51 8.60 21
Rank 2 4 3 5 1
Step 2: Product Mix (total direct labour hours is 114750)
Product Unit Labours
Sewing Kit 327000X.15 49050
Debbie 52000X.40 20800
Sarah 37000X.70 25900
Trish 44000X.20 8800
Mike 20400X.50 10200 (Diff.)
Total 114750
4. Calculation of Total contribution margin company can be Earn as per optimal product mix
Product Allocated labour hours cont. per hours Total contribution
Debbie 20800 20.25 421200
Trish 8800 15 132000
Sarah 25900 16.51 427609
Mike 10200 8.60 87720
Sewing kit 49050 21 1030050
Total contribution 2098579
5. Maximum Price walton toy willing to pay for adding unit of Mike is $8.60 per Labour hours, as contribution per hour of mike
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.