Direct Labour

 Direct Labour Essay

PROBLEM 4

The Gen Gadget Company companies a distinctive line of dolls and a doll dress regular sewing kit. With regard to the dolls is raising, and management requests assistance from you in determining an economical sales and production combine for next year. The company features provided this data:

ProductDemand Next Year (units)Selling Price every UnitDirect MaterialsDirect Labor Debbie50, 000$13. 50$4. 30$3. 20

Trish42, 000$5. 50$1. 10$2. 00

Sarah35, 000$21. 00$6. 44$5. 62

Mike40, 000$10. 00$2. 00$4. 00

Regular sewing kit325, 000$8. 00$3. 20$1. 60

The subsequent additional information can be bought:

a. The company's plant provides a capacity of 130, 500 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products.

w. The direct labor charge of $8 per hour is definitely expected to continue to be unchanged through the coming 12 months.

c. Set costs total $520, 000 per year. Variable overhead costs happen to be $2 every direct labor-hour.

d. All the company's non-manufacturing costs are fixed.

electronic. The company's completed goods products on hand is minimal and can be overlooked.

Required:

1 ) Determine the contribution perimeter per immediate labor-hour expended on each item.

2 . Prepare a schedule demonstrating the total direct labor-hours that is to be required to generate the products estimated to be sold through the coming year.

3. Look at the data you could have computed in (1) and (2) previously mentioned. How would you allocate the 130, 000 direct labor hours of capacity to Gen Toy Industry’s various products?

4. What is the highest selling price, in terms of a rate per hour, that Gen Doll Company can be willing to pay for more capacity (that is, to get added direct labor time)?

5. Assume again that the company would not want to lower sales of any item. Identify ways in which the company could obtain the further output.

REMEDY 4

Number 1

Products(1)

Selling

Price(2)

Direct

Materials(3)

Direct

Labor(4)

Variable

Expenditure

[(3) / $4](5)

Contribution

[(1)-(2)-(3)-(4)](6)

Labor Hours

(direct)

[(3) / $8](7)

Contribution

Margin per (Direct)

Labor Hour

[(5) / (6)]

Debbie$13. 50$4. 30$3. 20$0. 80$5. 20$0. 40$13. 00

Trish$5. 50$1. 10$2. 00$0. 50$1. 90$0. 25$7. 62

Sarah$21. 00$6. 44$5. 60$1. 40$7. 56$0. 70$10. 70

Mike$10. 00$2. 00$4. 00$1. 00$3. 00$0. 50$6. 00

Sewing Kit$8. 00$3. 20$1. 60$0. 40$2. 80$0. 20$14. 00

Operation

1 . Variable Overheads=Direct Labor

(Direct Labor / VOH Cost)

=Direct Labor

$4

2 . Contribution=Selling Price – Direct Elements – Immediate Labor – Variable Expenditure

3. Immediate Labor Hours=Direct Labor

Immediate Labor Charge

4. Contribution Margin per Direct Labor Hour=Contribution

Immediate Labor Hour

No . 2

Products(1)

Demand Next Year

(Units)(2)

Direct Labor Hours(3)

Total Direct Labor Hours

[(1) * (2)]

Debbie50, 0000. 4020, 000

Trish42, 0000. 2510, 500

Sarah35, 0000. 7024, 500

Mike40, 0000. 5020, 1000

Sewing Kit325, 0000. 2065, 000

Total DLH Necessary 140, 000

The company's grow capacity is definitely 130, 000 and the above calculation demonstrates there is a brief 10, 1000 labor hours per year.

No . 3

Allowance will be based on the contribution margin per immediate labor hour:

Product Position

ProductsContribution Perimeter Per (Direct) Labor HourRanking Debbie13. 002

Trish7. 604

Sarah10. 803

Mike6. 005

Sewing Kit14. 001

Allowance of Immediate Labor Several hours

ProductsProduction Share

(1)Direct Labor Hours

(2)Direct Labor Hours Usage

[(1) back button (2)]BalanceWorkings

Sewing Kit325, 0000. 2065, 00065000130, 000 – 66, 000

Debbie50, 0000. 4020, 0004500065, 000 – 20, 000

Sarah35, 0000. 7024, 5002050045, 000 – 24, 500

Trish42, 0000. 2510, 5001000020, five-hundred – 12, 500

Mike40, 0000. 5020, 000-1000010, 500 – twenty, 000

Number 4

One more labor period may be needed to produce the merchandise " Mike” as this provides the final product to be produced in the position. Therefore , the workings pertaining to the relevant expense to...

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