Refer to Figure 13-4

question 166

Multiple Choice

Refer to Figure 13-4. How many of each type of lamp must be sold to optimize total contribution margin?

• A) 18,000 classic lamps; 0 fancy lamps
• B) 0 classic lamps; 30,000 fancy lamps
• C) 10,000 classic lamps; 10,000 fancy lamps
• D) 0 classic lamps; 9,000 fancy lamps
• E) 90,000 classic lamps; 0 fancy lamps

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Definitions:

Unit Costs

The cost incurred to produce, store, or acquire one unit of a product or service.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, providing a basis for budgeting and financial planning.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output increases, usually due to inefficiencies that arise with large-scale production.

Production Volume

The quantity of products that a manufacturing system can produce over a specific period of time.