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Question - Dalton Company manufactures and sells two products. Relevant per-unit data concerning each product follow:
Product
Basic
Deluxe
Selling price
$43.00
$54.00
Variable costs
$21.00
$29.50
Machine hours
0.50
0.70
Required -
a. Calculate the contribution margin per machine hour for each product.
b. If 1,840 additional machine hours are available, which product should Dalton manufacture?
c. Prepare an analysis showing the total contribution margin if 1,840 additional hours are:
(1) Divided equally between the products.
(2) Allocated entirely to the product identified in part (b).
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