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Sand Corporation manufactures two styles of lamps - a Bedford Lamp and a Lowell Lamp. The following ...

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Sand Corporation manufactures two styles of lamps - a Bedford Lamp and a Lowell Lamp. The following ...

Sand 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   $20   $36
Variable costs   $5   $10
Machine hours required for one lamp   3   8

Total fixed costs are $42,000, and the machine hour capacity is 32,000 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.
A) True
B) False

Textbook

Horngren's Financial & Managerial Accounting, The Financial Chapters

Edition: 5^th

Authors: Miller-Nobles, Mattison, Matsumura

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7 years ago

Makes perfect sense, thx

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Mrgo-breed

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7 years ago

I'm liking this Slight Smile

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