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Dalton Inc

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Dalton Inc. produces and sells three products. Unit data concerning each product
is shown below.

D E F
Selling price   200  300  250
Direct labor costs  30  80  35
Other Variable costs  95  80  145

The company has 2,000 hours of labor available to build inventory in anticipation
of the company’s peak season. Management is trying to decide which product should be
produced. The direct labor hourly rate is $10.

Instructions
(a) Determine the number of direct labor hours per unit.
(b) Determine the contribution margin per direct labor hour.
(c) Determine which product should be produced and the total contribution margin for
that product.

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