Fact Pattern: Lazar Industries produces two products, crates and trunks. Per unit selling prices, costs, and resource utilization for these products are as follows. Selling price Direct material costs Direct labor costs Variable overhead costs Variable selling costs Crates Trunks $20 5 1831 OA. $3,000,000 OB. $7,000,000 C. $1,500,000 O D. $2,000,000 $30 5052 10 Machine hours per unit 2 4 Production of crates and trunks involves joint processes and use of the same facilities. The total fixed factory overhead cost is $2,000,000, and total fixed selling and administrative costs are $840,000. Production and sales are scheduled for 500,000 crates and 700,000 trunks. Lazar has a normal capacity to produce a total of 2,000,000 units in any combination of crates and trunks, and it maintains no direct materials, work-in-process, or finished goods inventory. Due to plant renovations, Lazar will be limited to 1,000,000 machine hours. What is the maximum amount of contribution margin Lazar can generate during the renovation period?

Fact Pattern: Lazar Industries produces two products, crates and trunks. Per unit selling prices, costs, and resource utilization for these products are as follows. Production of crates and trunks involves joint processes and use of the same facilities. The total fixed factory overhead cost is $2,000,000, and total fixed selling and administrative costs are $840,000. Production and sales are scheduled for 500,000 crates and 700,000 trunks. Lazar has a normal capacity to produce a total of 2,000,000 units in any combination of crates and trunks, and it maintains no direct materials, work-in-process, or finished goods inventory. Due to plant renovations, Lazar will be limited to 1,000,000 machine hours. What is the maximum amount of contribution margin Lazar can generate during the renovation period? A. $3,000,000 B. $7,000,000 C. $1,500,000 D. $2,000,000