Question

Dalton Inc. produces and sells three products. Unit data concerning each product is shown below. Product...

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

Product

D

E

F
Selling price $197.30 $308.50 $264.20
Direct labor costs 37.80 107.10 44.80
Other variable costs 92.00 79.00 149.00

The company has 2,100 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 $14.

Determine the number of direct labor hours per unit. (Round answers to 2 decimal places, e.g. 52.75.)

Determine the contribution margin per direct labor hour. (Round intermediate calculation and final answers to 2 decimal places, e.g. 52.75.)

Determine which product should be produced.

Determine the total contribution margin for that product.

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