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Home Q & A Board Other Fields Homework Help Business Accounting
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7 years ago
Rice Corporation manufactures two styles of lamps - a Bedford Lamp and a Lowell Lamp. The following per unit data are available:

   Bedford Lamp   Lowell Lamp
Sales price   $26   $36
Variable costs   $14   $26
Machine hours required for one lamp   4   5

Total fixed costs are $50,000. 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) 0 Bedford Lamps and 5,000 Lowell Lamps
B) 5,000 Bedford Lamps and 6,250 Lowell Lamps
C) 6,250 Bedford Lamps and 6,250 Lowell Lamps
D) 6,250 Bedford Lamps and 0 Lowell Lamps
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
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Mrgo-breedMrgo-breed
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7 years ago
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Deprecated Author
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#2
7 years ago
Makes perfect sense, thx
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