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Question
Management of a company is evaluating two potential orders. Due to limited capacity only one of these orders can be accepted. Incremental fixed costs are the same for either option. Based on the information in the table below, which of the following statements is true?
| Option A | Option B | |
| Number of units | 30 | 40 |
| Contribution margin ratio | 35% | 45% |
| Selling price per unit | $400 | $300 |
A. Option B has the highest contribution margin per unit.
B. Option A has the highest total contribution margin.
C. Option B has the lowest contribution margin ratio.
D. Option B has the highest total contribution margin.
E. Option A has the highest amount per dollar of sales to contribute to contribution margin and profit.
Answer
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Related questions
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Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
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Q:
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Q:
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Q:
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Q:
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Q:
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42
25 A. 15,000 croquet sets.
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B. Neither product A nor product B should be processed further.
C. Only product B should be processed further.
D. Only product A should be processed further.
E. A processing further decision cannot be made from the available data.
Q:
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B. Income will increase by $7 per unit.
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Q:
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Q:
Assume markup percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the markup per unit?
A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
Capital budgeting decisions are generally based on:
A. Tentative predictions of future outcomes.
B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.