Dalton Inc. produces and sells three products. Unit data concerning each product

Question

Dalton Inc. produces and sells three products. Unit data concerning each product is shown below. Product D E F Selling price $ 194.6 $ 304.2 $ 239.1 Direct labor costs 31.2 93.6 37.2 Other variable costs 101 78 143 The company has 2,300 hours of labor available to build inventory in anticipation of the company’s peak season. Management is trying to decide which product should be produced. The direct labor hourly rate is $ 12 .

Exercise 20-12 Dalton Inc. produces and sells three products. Unit data concerning each product is shown below Product Selling price Direct labor costs Other variable costs $194.6 31.2 101 $304.2 93.6 78 $239.1 37.2 143 The company has 2,300 hours of labor available to build inventory in anticipation of the company's peak season. Management is trying to decide which product should be produced. The direct labor hourly rate is 12 Determine the number of direct labor hours per unit. (Round answers to 1 decimal place,e.g. 1.5.) Direct labor ProductD Product E Product F hours per unit hours per unit hours per unit LINK TO TEXT VIDEO: SIMILAR EXERCISE

Explanation / Answer

Product D Product E Product F Direct labor costs 31.2 93.6 37.2 Direct labor rate 12 12 12 Diret labor hours per unit 2.6 7.8 3.1 Product D Product E Product F Selling price 194.6 304.2 239.1 Less: Variable costs Direct labor costs 31.2 93.6 37.2 Other varianble costs 101 78 143 Contrbution margin per unit 62.4 132.6 58.9 Direct labor hours per unit 2.6 7.8 3.1 Contrbution margin per direct labor hour 24 17 19 Product D should be produced Total contribution margin = 2300*24= $55200

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