Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour): Clash Slash Sales price (per unit) $ 240 $ 168 Costs (per unit): Direct materials 67 31 Direct labor 36 60 Variable factory overhead (@ $15 per DLH) 60 30 Allocated fixed factory overhead (based on DLHs) 24 12 Marketing expenses (all variable) 35 24 Total costs 222 157 Operating income (per unit) $ 18 $ 11 There is insufficient labor capacity in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. The contribution margin per unit for Clash is:

Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour): Clash Slash Sales price (per unit) $ 240 $ 168 Costs (per unit): Direct materials 67 31 Direct labor 36 60 Variable factory overhead (@ $15 per DLH) 60 30 Allocated fixed factory overhead (based on DLHs) 24 12 Marketing expenses (all variable) 35 24 Total costs 222 157 Operating income (per unit) $ 18 $ 11 There is insufficient labor capacity in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. The contribution margin per unit for Clash is:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

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	Clash	Slash
Sales price (per unit)	$ 240	$ 168
Costs (per unit):
Direct materials	67	31
Direct labor	36	60
Variable factory overhead (@ $15 per DLH)	60	30
Allocated fixed factory overhead (based on DLHs)	24	12
Marketing expenses (all variable)	35	24
Total costs	222	157
Operating income (per unit)	$ 18	$ 11

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