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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 |
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:
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