Leggero Corporation manufactures two styles of lamps - Bedford Lamp and Lowell Lamp.The following per unit data are available:

Total fixed costs are $46,000,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

Leggero Corporation manufactures two styles of lamps - Bedford Lamp and Lowell Lamp.The following per unit data are available:
  
Total fixed costs are $46,000,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

11ea86ed_2afe_9597_8b27_65f5fae8a600_TB3056_00 Because contribution margin per machine hour of a Lowell Lamp is less than a Bedford Lamp,the above statement is false.

Leggero Corporation Manufactures Two Styles of Lamps - Bedford Lamp