Crossover Incorporated produces two basic types of video gam…
Crossover Incorporated produces two basic types of video games, SwishSwish and CrunchCrunch. Pertinent data follow (DLH = direct labor hour): SwishSwish CrunchCrunch Sales price (per unit) $ 350 $ 278 Costs (per unit): Direct materials 78 42 Direct labor 58 82 Variable factory overhead (@ $15 per DLH) 60 30 Allocated fixed factory overhead (based on DLHs) 24 12 Marketing expenses (all variable) 46 35 Total costs 266 201 Operating income (per unit) $ 84 $ 77There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both SwishSwish and CrunchCrunch. Both products are produced through the same production departments.3) In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?