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Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13...

Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13 and $21, respectively. Each lamp must spend time on a special machine. The firm owns four machines that together provide 18,000 hours of machine time per year. The classic lamp requires 0.20 hours of machine time, the fancy lamp requires 0.50 hours of machine time.

What is the contribution margin per hour of machine time for a classic lamp?

a.$104

b.$16

c.$13

d.$26

e.$65

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Answer #1

Contribution margin per hour of machine time for classic lamp

= 13/0.20

= 65

Option E is the answer
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