Question

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 company has provided the following data:

Product Demand Next year Selling Price per Unit Direct Materials Direct Labor
(units)
Debbie 69,000 $ 41.00 $ 4.60 $ 4.00
Trish 61,000 $ 4.50 $ 1.50 $ 1.00
Sarah 54,000 $ 30.50 $ 9.29 $ 7.00
Mike 46,800 $ 15.00 $ 3.90 $ 5.00
Sewing kit 344,000 $ 9.90 $ 5.10 $ 0.50
The following additional information is available:

The company’s plant has a capacity of 100,400 direct labor-hours per year on a single-shift basis. The company’s present employees and equipment can produce all five products.
The direct labor rate of $10 per hour is expected to remain unchanged during the coming year.
Fixed manufacturing costs total $575,000 per year. Variable overhead costs are $2 per direct labor-hour.
All of the company’s nonmanufacturing costs are fixed.
The company’s finished goods inventory is negligible and can be ignored.

How many direct labor hours are used to manufacture one unit of each of the company’s five products?

Answer 1

The number of direct labor hours to manufacture one unit of each product are Debbie (0.4 hours), Trish (0.1 hours), Sarah (0.7 hours), Mike (0.5 hours), and Sewing kit (0.05 hours), calculated by dividing the direct labor per unit by the direct labor rate of $10/hr.

Step-by-step explanation:

To calculate the number of direct labor hours used to manufacture one unit of each of the Walton Toy Company's products, we need to reference the direct labor cost per unit provided and the cost per direct labor hour. Given that the direct labor rate is $10 per hour, we can determine the labor hours by dividing the direct labor cost for each product by the direct labor rate.

• Debbie: $4.00 direct labor / $10 per hour = 0.4 hours per unit
• Trish: $1.00 direct labor / $10 per hour = 0.1 hours per unit
• Sarah: $7.00 direct labor / $10 per hour = 0.7 hours per unit
• Mike: $5.00 direct labor / $10 per hour = 0.5 hours per unit
• Sewing kit: $0.50 direct labor / $10 per hour = 0.05 hours per unit

Therefore, these are the labor hours required to manufacture one unit of each product: Debbie (0.4 hours), Trish (0.1 hours), Sarah (0.7 hours), Mike (0.5 hours), and Sewing kit (0.05 hours).