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Park Printers operates a printing press with a monthly capacity of 3,400 machinehours. Park Printers has two main customers: Derby Corporation and Lisa Corporation. Data

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Park Printers operates a printing press with a monthly capacity of 3,400 machinehours. Park Printers has two main customers: Derby Corporation and Lisa Corporation. Data on each customer for January is provided in the accompanying table. a [Click to View the data] Lisa Corporation indicates that itwants Park Printers to do an additional 5204.000 worth of printing jobs during February. These jobs are identical to the existing business Park Printers did for Lisa Corporation in January in terms of variable costs and machinehours required. Park anticipates that the business from Derby Corporation in February will be the same as that in January. Park can choose to accept as much of the Derby Corporation and Lisa Corporation business for February as its capacity allows. Assume that total machine-hours and xed costs for February will be the same as in January. uired What action should Park take to maximize its operating income? Show your calculations. Begin by calculating the amount that should be used to determine the allocation. Derby Corporation Lisa Corporation Variable cost per machine-hour Derby Corporation Lisa Corp oration Total Revenues 305,000 $ 204,000 $ 510,000 Variable costs 193.500 155.400 350,200 Contribution margin 112,200 4?,600 159,800 72,000 48,000 'I 20,000 Fixed costs {allocated} Operating income 40-200 $ [400} $ 39.500 :s Calculator Machine-hours required 2.550 hours 850 hours 3.400 hours Check

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