Question
Beacon Corporation manufactures two styles of lamps Bedford Lamp and Lowell Lamp. The following per unit data are available: Bedford Lamp Lowell Lamp Sales price
Beacon Corporation manufactures two styles of lamps Bedford Lamp and Lowell Lamp. The following per unit data are available:
Bedford Lamp | Lowell Lamp | |
Sales price | $28 | $35 |
Variable costs | $15 | $23 |
Machine hours required for one lamp | 1 | 4 |
Total fixed costs are $31,000, and Beacon can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 25,000 hours per year. What is the contribution margin per machine hour for the Bedford Lamp? (Round your answer to the nearest cent.)
A. $3.00 per machine hour
B. $35.00 per machine hour
C. $28.00 per machine hour
D. $13.00 per machine hour
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started