Mudd Corp. manufactures two styles of table lamps, Gold and Silver. The following data is available: Mudd can sell a maximum of 10,000 units of each style of lamp. Machine hour capacity is 25,000 hours per year.
Required:
a. Which lamp has the highest contribution margin per unit?
b. Which lamp has the highest contribution margin per hour?
c. How many lamps of each style should be produced to maximize income, and what is the maximum income?

Question

Mudd Corp. manufactures two styles of table lamps, Gold and Silver. The following data is available:  Mudd can sell a maximum of 10,000 units of each style of lamp. Machine hour capacity is 25,000 hours per year.
Required:
a. Which lamp has the highest contribution margin per unit?
b. Which lamp has the highest contribution margin per hour?
c. How many lamps of each style should be produced to maximize income, and what is the maximum income?

Quizplus · Accepted Answer

The Answer of Mudd Corp. manufactures two styles of table lamps, Gold and Silver. The following data is available:  Mudd can sell a maximum of 10,000 units of each style of lamp. Machine hour capacity is 25,000 hours per year.
Required:
a. Which lamp has the highest contribution margin per unit?
b. Which lamp has the highest contribution margin per hour?
c. How many lamps of each style should be produced to maximize income, and what is the maximum income?

Mudd Corp Manufactures Two Styles of Table Lamps, Gold and Silver