Question

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: Softy Friendly Goody 75,000 62,800 52,500 $ 28.50 $ 13.50 $ 44.50 $ Besty 60,000 22.50 Lovey 107,000 $ 18.50 Demand (units) Price per unit Variable costs: Direct materials Direct labour 13.25 6.00 5.25 3.75 18.60 10.50 7.50 7.50 10.50 3.00 The following additional information is available: 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. Variable 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.) Softy Friendly Goody Besty Lovey Answer is complete and correct. DLH Per Unit 0.40 0.25 0.70 0.50 0.20

Please help fix this wrong answer!

Answer 1

Requirement (1) $ Softy Friendly Goody Besty Lovey Direct Labour Direct Labour rate per hour DLH Per Unit 6.00 $ 15.00 $ $ 3.75 $ 15.00 $ $ 10.50 $ 15.00 $ 7.50 $ 15.00 $ $ 3.00 $ 15.00 $ 0.40 0.25 0.70 0.50 0.20 $ Requirement (2) Product Softy Friendly Goody Besty Lovey $ $ Direct Labour Hour Per Unit 0.40 Hours 0.25 Hours 0.70 Hours 0.50 Hours 0.20 Hours $ Estimated Sales (Units) Total Hours 75000 $ 30,000 62800 $ 15,700 52500 $ 36,750 60000 $ 30,000 107000 $ 21,400 $ 133,850 $ $ Requirement (3) Highest Price Per Hour ($15+$9) $ 24.00 $ Softy Price Per Unit $ Direct material cost per unit $ Direct labour cost Variable cost $ Contribution margin per unit $ DLH required per unit $ Contribution margin per DLH $ Friendly 28.50 $ 13.25 $ 6.00 $ 2.40 $ 6.85 $ 0.40 $ 17.13 $ Goody 13.50 $ 5.25 $ 3.75 $ 1.50 $ 3.00 $ 0.25 $ 12.00 $ Besty Lovey 44.50 $ 22.50 $ 18.50 18.60 $ 7.50 $ 10.50 10.50 $ 7.50 $ 3.00 4.20 $ 3.00 $ 1.20 11.20 $ 4.50 $ 3.80 0.70 $ 0.50 $ 0.20 16.00 $ 9.00 $ 19.00 Ranking II IV III V I Note : Comment down for any issues