Question
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 | $30 | $35 |
Variable costs | $18 | $23 |
Machine hours required for one lamp | 2 | 4 |
Total fixed costs are $50,000. Machine hour capacity is 30,000 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 | 7500 Bedford Lamps and 15,000 Lowell Lamps |
b | 0 Bedford Lamps and 7500 Lowell Lamps |
c | 15,000 Bedford Lamps and 0 Lowell Lamps |
d | 15,000 Bedford Lamps and 15,000 Lowell Lamps |
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