Question

Deng Corporation manufactures two styles of lamps

long dash—

Bedford Lamp and Lowell Lamp. The following per unit data are​ available:

	Bedford Lamp	Lowell Lamp
Sales price	$ 30$30	$ 35$35
Variable costs	$ 18$18	$ 23$23
Machine hours required for one lamp	22	44

Total fixed costs are

$ 40 comma 000$40,000.

Machine hour capacity is

25 comma 00025,000

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.

12 comma 50012,500

Bedford Lamps and

00

Lowell Lamps

B.

00

Bedford Lamps and

6 comma 2506,250

Lowell Lamps

C.

12 comma 50012,500

Bedford Lamps and

12 comma 50012,500

Lowell Lamps

D.

6 comma 2506,250

Bedford Lamps and

12 comma 50012,500

Lowell Lamps

Answer 1