Zap Video Inc. produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour):

	Clash			Slash
Sales price (per unit)	$	240		$	168
Costs (per unit):
Direct materials		67			31
Direct labor		36			60
Variable factory overhead (@ $15 per DLH)		60			30
Allocated fixed factory overhead (based on DLHs)		24			12
Marketing expenses (all variable)		35			24
Total costs		222			157
Operating income (per unit)	$	18		$	11

There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both Clash and Slash.

Both products are produced through the same production departments.

In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?

Multiple Choice

• Clash, $18.00.

• Clash, $10.50.

• Slash, $23.00.

• Slash, $11.50.

• Slash, $11.00.