Crown Co Can Produce Two Types of Lamps, the Enlightner and and Foglighter

question 92

Multiple Choice

Crown Co. can produce two types of lamps, the Enlightner and Foglighter. The data on the two lamp models are as follows:It takes one machine hour to produce each product. Total fixed costs for the manufacture of both products are $90,000. Demand is high enough for either product to keep the plant operating at maximum capacity.
Assuming that sales mix in terms of dollars remains constant, what is the breakeven point in dollars? (Round intermediate calculations to 4 decimal places and final answer up to the nearest whole number.)

• A) $244,765.
• B) $306,513.
• C) $118,365.
• D) $945,667.
• E) $288,735.

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Definitions:

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service and the actual amount received from selling it at the market price.

Cupcakes

Small, individually-sized cakes that are typically frosted and decorated, often used to celebrate events or milestones.

Total Surplus

Total surplus is the sum of consumer surplus and producer surplus in a market, representing the total benefits to both buyers and sellers from trade.

Producer Surplus

The difference between the amount that producers are willing to sell a good for and the actual amount received by them.