Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Deng Corporation manufactures two styles of lamps Bedford Lamp and Lowell Lamp. The following per unit data are available: Bedford Lamp Lowell Lamp Sales price
Deng Corporation manufactures two styles of lamps Bedford Lamp and Lowell Lamp. The following per unit data are available:
Bedford Lamp | Lowell Lamp | |
Sales price | $25 | $35 |
Variable costs | $17 | $23 |
Machine hours required for one lamp | 2 | 4 |
Total fixed costs are $40,000. Machine hour capacity is 20,000 hours per year. Assuming that the company can sell as many products as it can make, which product mix would deliver the highest operating income?
a.10,000 Bedford Lamps and 10,000 Lowell Lamps | ||
b. 5000 Bedford Lamps and 10,000 Lowell Lamps | ||
c.10,000 Bedford Lamps and 0 Lowell Lamps | ||
d.0 Bedford Lamps and 5000 Lowell Lamps |
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