Clay Corporation Manufactures Two Styles of Lamps-A Bedford Lamp and a Lowell

question 73

Multiple Choice

Clay Corporation manufactures two styles of lamps-a Bedford Lamp and a Lowell Lamp.The following per unit data are available: Total fixed costs are $30,000,and Clay can sell a maximum of 10,000 units of each style of lamp annually.Machine hour capacity is 25,000 hours per year.
-What is the contribution margin per machine hour for the Lowell lamp?

• A)$4 per machine hour
• B)$2 per machine hour
• C)$3 per machine hour
• D)$12 per machine hour

---

Definitions:

Generally Accepted Accounting Principles

A framework of accounting standards, principles, and procedures that companies must follow when compiling their financial statements in the U.S.

Stringent Rules

Strict and precise regulations or guidelines that must be followed, often used in contexts such as legal, financial, and quality control processes.

Manage Earnings

Tactics companies employ to influence their financial statements, often to meet forecasts or financial targets.

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a set of accounting standards and procedures used in the United States to ensure financial information is consistent and transparent.