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Pena 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 $27 $35 Variable costs $16 $22 Machine hours required for one lamp 2 6 Total fixed costs are $32,000, and Pena can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 30,000 hours per year. What is the 7 contribution margin per machine hour for the Lowell Lamp? A) $5.50 per machine hour B) $13.50 per machine hour C) $2.17 per machine hour D) $17.50 per machine hour

Pena 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 $27 $35 Variable costs $16 $22 Machine hours required for one lamp 2 6 Total fixed costs are $32,000, and Pena can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 30,000 hours per year. What is the 7 contribution margin per machine hour for the Lowell Lamp? A) $5.50 per machine hour B) $13.50 per machine hour C) $2.17 per machine hour D) $17.50 per machine hour

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pena 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 $27 $35 Variable costs $16 $22 Machine hours required for one lamp 2 6 Total fixed costs are $32,000, and Pena can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 30,000 hours per year. What is the 7 contribution margin per machine hour for the Lowell Lamp? A) $5.50 per machine hour B) $13.50 per machine hour C) $2.17 per machine hour D) $17.50 per machine hour
Transcribed Image Text:Pena 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 $27 $35 Variable costs $16 $22 Machine hours required for one lamp 2 6 Total fixed costs are $32,000, and Pena can sell a maximum of 10,000 units of each style of lamp annually. Machine hour capacity is 30,000 hours per year. What is the 7 contribution margin per machine hour for the Lowell Lamp? A) $5.50 per machine hour B) $13.50 per machine hour C) $2.17 per machine hour D) $17.50 per machine hour
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