Dulko Corporation manufactures two styles of clocks,a Mantle Clock and a Cuckoo Clock.The following per unit data are available:

Total fixed costs are $600,000 and Dulko can sell a maximum of 25,000 units of each style of lamp annually.Machine hour capacity is 40,000 hours per year.
Required:
1.Determine the contribution margin per unit for each type of clock.
2.Determine the contribution margin per machine hour for each type of clock.
3.Determine the number of units of each style of clock that Dulko should produce to maximize operating income.
4.What is the dollar amount of the maximum operating income as calculated in 3 above?

Question

Dulko Corporation manufactures two styles of clocks,a Mantle Clock and a Cuckoo Clock.The following per unit data are available:
  
Total fixed costs are $600,000 and Dulko can sell a maximum of 25,000 units of each style of lamp annually.Machine hour capacity is 40,000 hours per year.
Required:
1.Determine the contribution margin per unit for each type of clock.
2.Determine the contribution margin per machine hour for each type of clock.
3.Determine the number of units of each style of clock that Dulko should produce to maximize operating income.
4.What is the dollar amount of the maximum operating income as calculated in 3 above?

Quizplus · Accepted Answer

The Answer of Dulko Corporation manufactures two styles of clocks,a Mantle Clock and a Cuckoo Clock.The following per unit data are available:
  
Total fixed costs are $600,000 and Dulko can sell a maximum of 25,000 units of each style of lamp annually.Machine hour capacity is 40,000 hours per year.
Required:
1.Determine the contribution margin per unit for each type of clock.
2.Determine the contribution margin per machine hour for each type of clock.
3.Determine the number of units of each style of clock that Dulko should produce to maximize operating income.
4.What is the dollar amount of the maximum operating income as calculated in 3 above?

Dulko Corporation Manufactures Two Styles of Clocks,a Mantle Clock and a Cuckoo