Answer and Explanation:
The computation is shown below:
a. Contribution margin per unit
As we know that
Contribution margin per unit = Selling price per unit - variable cost per unit
Particulars Product A Product B Product C
Selling price per unit $76 $56 $66
Variable cost per unit $48 $19 $39
Contribution margin per unit $28 $37 $27
b. Contribution margin per direct labor hour for each product
Contribution margin per direct labor hour = Contribution margin per unit ÷ Direct labor hours per unit
Particulars Product A Product B Product C
Contribution margin per unit $28 $37 $27
Direct labor hours per unit 2.5 3.9 2.9
Contribution margin per direct labor hour $11.2 $9.49 $9.31
c. Based on the contribution margin per direct labor hour, the product that should be more focused is product A
