Sand Corporation manufactures two styles of lamps-a Bedford Lamp and a Lowell Lamp.The following per unit data are available:
Total fixed costs are $40,000 and the machine hour capacity is 30,000 hours per year.The Lowell lamp has the highest contribution margin per unit,and also has the highest contribution margin per machine hour,so the company should focus sales on the Lowell lamp.

Question

Sand Corporation manufactures two styles of lamps-a Bedford Lamp and a Lowell Lamp.The following per unit data are available:
  Total fixed costs are $40,000 and the machine hour capacity is 30,000 hours per year.The Lowell lamp has the highest contribution margin per unit,and also has the highest contribution margin per machine hour,so the company should focus sales on the Lowell lamp.

Quizplus · Accepted Answer

11ea84d1_118c_2638_83dc_3d32b3390722_TB3006_00 Since contribution margin per machine hour of Lowell Lamp is less than Bedford Lamp,the above statement is false.

Sand Corporation Manufactures Two Styles of Lamps-A Bedford Lamp and a Lowell