Clay Corporation manufactures two styles of lamps-a Bedford Lamp and a Lowell Lamp. The following per unit data are available: Total fixed costs are $30,000, and Clay can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 25,000 hours per year.
-Assuming that the company can sell as many products as it can make, which product mix would deliver the highest operating income?
A) 10,000 Bedford lamps, 1,250 Lowell lamps
B) Zero Bedford lamps, 6,250 Lowell lamps
C) 12,500 Bedford lamps, zero Lowell lamps
D) 12,500 Bedford lamps, 12,500 Lowell lamps
Correct Answer:
Verified
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