Dalton Company manufactures and sells two products. Relevant per-unit data concerning each product follow: Instructions (a) Calculate

Question:

Dalton Company manufactures and sells two products. Relevant per-unit data concerning each product follow:

Instructions
(a) Calculate the contribution margin per machine hour for each product.
(b) If 1,000 additional machine hours are available, which product should Dalton manufacture?
(c) Prepare an analysis showing the total contribution margin if the additional hours are
1. Divided equally between the products.
2. Allocated entirely to the product identified in part (b).

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...