Exercise 20-12 (Part Level Submission) Dalton Inc. produces and sels three produ
ID: 2431949 • Letter: E
Question
Exercise 20-12 (Part Level Submission) Dalton Inc. produces and sels three products. Unit data concerning each product is shown below Product Selling price Direct labor costs Other variable costs s199.8 31.2 101 s 309,1 93.6 79 s 245.1 37.2 149 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 $ 12 Y(a) Your answer is correct Determine the number of direct labor hours per unit. (Round answers to 1 decimal place, e.g. 1.5.) Direct labor Product D Product E Product F hours per unit hours per unit hours per unit 2.6 SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 usedExplanation / Answer
a) Direct Labor Product D 2.6 hours per unit Product E 7.8 hours per unit Product F 3.1 hours per unit Working: Direct Labor cost / Direct Labor hourly rate = Direct Labor hours per unit Product D $ 31.2 / $ 12 = 2.6 Product E $ 93.6 / $ 12 = 7.8 Product F $ 37.2 / $ 12 = 3.1 b) Product D Product E Product F Contribution Margin per direct labor hour $ 26.0 $ 17.5 $ 19.0 Working: Product D Product E Product F Selling Price $ 199.8 $ 309.1 $ 245.1 Direct Labor cost $ -31.2 $ -93.6 $ -37.2 Other variable cost $ -101.0 $ -79.0 $ -149.0 Contribution Margin per unit $ 67.6 $ 136.5 $ 58.9 /Direct Labor hours per unit 2.6 7.8 3.1 Contribution Margin per direct labor hour $ 26.0 $ 17.5 $ 19.0 c) Product to be produced Product D Total Contribution Margin $ 54,600 Working: Product D Total diect labor hours 2100 /Direct Labor hours of one unit 2.6 Total units to be produced 808 * Contribution margin per unit $ 67.6 Total contribution margin $ 54,600
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