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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		Besty		Lovey
Demand (units)		81,000		67,600		56,700		64,800		115,400
Price per unit	$	39.00	$	32.00	$	29.00	$	20.00	$	25.00
Variable costs:
Direct materials		3.90		3.10		5.90		4.40		2.70
Direct labour		6.40		4.00		11.20		8.00		3.20

The following additional information is available:

a.	The companys plant has a capacity of 120,000 direct labour-hours per year on a single-shift basis. The companys present employees and equipment can produce all five products.
b.	The direct labour rate is $16 per hour; this rate is expected to remain unchanged during the coming year.
c.	Fixed manufacturing costs amount to $790,000 per year. Variable overhead costs are $5 per direct labour-hour.
d.	All of the companys 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.)

2.	Keeping in mind the direct labour-hour capacity, what should be the companys product mix for the upcoming year? Prepare a schedule in support of your recommendation. (Round "Per Unit" to 2 decimal places.)

3.	What is the highest price, in terms of a rate per hour, that SCF would be willing to pay for additional capacity (i.e., for added direct labour time)?

4.	Assume again that the company does not want to reduce sales of any product. Identify ways the company could obtain the additional output. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
	Adding another shift Contracting out some work to outside suppliers Employing additional labour force Expanding the workforce Eliminating wasted labour time in the production process Utilizing the unutilized capacity Working overtime

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