11S Weygandt, Financial & Managerial Accounting, 2e Help I System Exercise 20-12

Question

11S Weygandt, Financial & Managerial Accounting, 2e Help I System Exercise 20-12 (Part Level Submission) Daiton Inc. produces and sells three products. Unit data concerning each product is shown below. Selling price 199.4 323.0 107.1 82 262.7 43.4 Direct laber costs Other variable costs which product should be produced. The direct labor hourty rate is s 14 (a) Your arswer is correct. Determine the number of direct labor hours per unit. (Round anowers to & decimal place, e.p 1.s) 37.1 The company hes 2,100 hours of abor svalabis to buid nventory in endcipetion of the company's peak season. Management is trying to decide Direct labor Product D Product tE Product 2.60 hours per unit 7.65 hours per unit 1.1 hours per usit Attempts 1 of 3 used 8 0 5

Explanation / Answer

b.) Contribution margin per direct labor :-

  

c.)   Product D should be produced because it has highest Contribution margin per direct labor hour ($25.5) among all other Products ,

Total contribution margin for Product D = Total hours of direct labor * Contribution margin per direct labor hour

= 2100 hours * $25.5

= $53550

Product D Product E Product F Selling price 199.4 323.0 262.7 less: Direct labor cost 37.1 107.1 43.4 less: other variable cost   96    82    148      Contribution margin $66.3 $133.9 $71.3 Direct labor hour per unit 2.60 7.65 3.1 Contribution margin per direct labor hour $25.5 $17.5 $23

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