f. Short-Term Product-Mix Decision DVD Production Company produces two basic types ofvideo games, Flash and Clash. Pertinent data for DVD Production Company follow:*Based on direct labor hours: 4 direct labor hours (DLHs) per unit of Flash and 2 DLHs perunit of Clash.Flash ClashSales price $250 $140CostsDirect materials 50 25Direct labor (@ $25/hr.) 100 50Variable factory overhead* 50 25Fixed factory overhead* 20 10Marketing costs (all fixed) 10 10Total costs $230 $120Operating profit $ 20 $ 20The DVD game craze is at its height so that either Flash or Clash alone can be sold to keep the plantoperating at full capacity. However, labor capacity in the plant is insufficient to meet the combineddemand for both games. Flash and Clash are processed through the same production departments.Required1. What is the meaning and importance of the statement that “Flash and Clash are processed through thesame production departments”?
f. 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:
*Based on direct labor hours: 4 direct labor hours (DLHs) per unit of Flash and 2 DLHs per
unit of Clash.
Flash Clash
Sales price $250 $140
Costs
Direct materials 50 25
Direct labor (@ $25/hr.) 100 50
Variable factory
Fixed factory overhead* 20 10
Marketing costs (all fixed) 10 10
Total costs $230 $120
Operating profit $ 20 $ 20
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
1. What is the meaning and importance of the statement that “Flash and Clash are processed through the
same production departments”?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
