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Clay Corporation manufactures two styles of lampsa Bedford Lamp and a Lowell Lamp. The following per unit data areavailable: Bedford Lamp Lowell Lamp Sale price
Clay Corporation manufactures two styles of lampsa Bedford Lamp and a Lowell Lamp. The following per unit data areavailable:
Bedford Lamp | Lowell Lamp | |
Sale price | $25 | $35 |
Variable costs | $17 | $23 |
Machine hours required for 1 lamp | 2 | 4 |
Total fixed costs are$30,000. Machine hour capacity is25,000 hours per year. Assuming that the company can sell as many products as it canmake, which product mix would deliver the highest operatingincome?
A.12,500 Bedfordlamps, zero Lowell lamps
B.Zero Bedfordlamps, 6,250 Lowell lamps
C.12,500 Bedfordlamps, 12,500 Lowell lamps
D.10,000 Bedfordlamps, 1,250 Lowell lamps
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