Theory of constraints, contribution margin, sensitivity analysis. Fun Time Toys (FTT) produces dolls in two processes: molding and assembly. FTT is currently producing two models: Chatty Chelsey and Talking Tanya. Production in the molding department is limited by the amount of materials available. Production in the assembly department is limited by the amount of trained labor available. The only variable costs are materials in the molding department and labor in the assembly department. Following are the requirements and limitations by doll model and department:

Required

1. If there were enough demand for either doll, which doll would FTT produce? How many of these dolls would it make and sell?

2. If FTT sells two Chatty Chelseys for each Talking Tanya, how many dolls of each type would it produce and sell? What would be the total contribution margin?

3. If FTT sells two Chatty Chelseys for each Talking Tanya, how much would production and contribution margin increase if the molding department could buy 15 more pounds of materials for $12 per pound?

4. If FTT sells two Chatty Chelseys for each Talking Tanya, how much would production and contribution margin increase if the assembly department could get 10 more labor hours at $18 perhour?

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Molding Materials 1.5 pounds per doll 2 pounds per doll 30,000 pounds $12 per pound Selling Price $39 per doll $51 per doll Assembly Time 20 minutes per doll 30 minutes per doll 8,500 hours $18 per hour Chatty Chelsey Talking Tanya Materials/Labor Available Cost