Dulko Corporation manufactures two styles of clocks, a Mantle Clock and a Cuckoo Clock. The following per unit data are available:
Machine hours required for 1 clock | 1 | 2 |
Total fixed costs are $600,000 and Dulko can sell a maximum of 25,000 units of each style of lamp annually. Machine hour capacity is 40,000 hours per year.
Required:
1. | Determine the contribution margin per unit for each type of clock. |
2. | Determine the contribution margin per machine hour for each type of clock. |
3. | Determine the number of units of each style of clock that Dulko should produce to maximize |
operating income.
4. | What is the dollar amount of the maximum operating income as calculated in 3 above? |