Short-Term Product-Mix Decision DVD Production Company produces two basic types of video games, Flash and Clash....

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Short-Term Product-Mix Decision DVD Production Company produces two basic types of video games, Flash and Clash. Pertinent data for DVD Production Company follow: Flash $ 370 Clash $ 200 Sales price Costs Direct materials Direct labor (@ $25/hour) Variable factory overhead* Fixed factory overhead* Marketing costs (all fixed) Total costs 85 100 85 30 20 45 50 50 20 15 $ 320 $ 50 $ 180 $ 20 Operating profit *Based on direct labor hours: 4 direct labor hours (DLHS) per unit of Flash and 2 DLHS per unit of Clash. The DVD game craze is at its height so that either Flash or Clash alone can be sold to keep the plant operating at full capacity. However, labor capacity in the plant is insufficient to meet the combined demand for both games. Flash and Clash are processed through the same production departments. Required: 2a. Calculate the contribution margin per labor hour for both Flash and Clash. (Round your answers to 2 decimal places.) Short-Term Product-Mix Decision DVD Production Company produces two basic types of video games, Flash and Clash. Pertinent data for DVD Production Company follow: Flash $ 370 Clash $ 200 Sales price Costs Direct materials Direct labor (@ $25/hour) Variable factory overhead* Fixed factory overhead* Marketing costs (all fixed) Total costs 85 100 85 30 20 45 50 50 20 15 $ 320 $ 50 $ 180 $ 20 Operating profit *Based on direct labor hours: 4 direct labor hours (DLHS) per unit of Flash and 2 DLHS per unit of Clash. The DVD game craze is at its height so that either Flash or Clash alone can be sold to keep the plant operating at full capacity. However, labor capacity in the plant is insufficient to meet the combined demand for both games. Flash and Clash are processed through the same production departments. Required: 2a. Calculate the contribution margin per labor hour for both Flash and Clash. (Round your answers to 2 decimal places.)

Answer rating: 100% (QA)

2a Computation of contribution margin per labor hour for both Fl... View the full answer