Which of the Following Products Should Be Produced to Maximize

question 27

Multiple Choice

Which of the following products should be produced to maximize profit?

• A)Product A: Sales volume of 10,000 units, unit contribution margin of $20, fixed costs of $120,000.
• B)Product B: Sales volume of 9,000, unit contribution margin of $22, fixed costs of $150,000.
• C)Product C: Sales volume of 8,000, unit contribution margin of $21, fixed costs of $110,000.
• D)Product D: Sales volume of 11,000, unit contribution margin of $23, fixed costs of $170,000.

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Definitions:

Previous Forecast

An estimation or prediction made in the past about future events or conditions, often used as a reference for current planning.

Four-month Moving Average

A method to smooth out data series by averaging the data over four-month periods, often used to identify trends.

Forecast for May

A predictive analysis or estimate of events or trends that will occur in May, often used in sales, marketing, or production planning.

Weighted Moving Average Method

A forecasting technique that assigns different weights to historical data points, giving more importance to more recent data.