Use the Information Below to Answer the Following Questions The Demand for All Service Is Unlimited

question 50

Multiple Choice

Use the information below to answer the following questions.
Computers Expertise Ltd provides three services, the details for which are as follows: $\begin{array}{llll}& \underline{\text { Basic} }& \underline{ \text { Secretarial }} & \underline{ \text { Expert }}\\ \text { Sales price per unit } & \$ 20 & \$ 30 & \$ 50 \\\text { Variable cost per unit } & \$ 10 & \$ 12 & \$ 15 \\\text { (paper, transport, etc.) } & & & \\\text { Labour time per unit } & 1 \text { hour } & 2 \text { hours } & 5 \text { hours } \\\text { Annual fixed costs } & \$ 20,000 & &\end{array}$
The demand for all service is unlimited. The ability to provide the service is limited by the availability of qualified staff and therefore the labour time available.
-Refer to the table above. Which product is the most profitable?

• A)Expert, because it has the highest contribution margin.
• B)Expert, because it has the highest sales price.
• C)Secretarial, because it is the most pleasurable for staff.
• D)Basic, because it provides the highest dollar contribution per labour hour.

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Definitions:

Sociocultural Psychologists

Researchers who examine how social, cultural, and environmental contexts influence behavior and mental processes.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable, suggesting a resemblance.

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The social behavior and norms found in human societies, including knowledge, beliefs, arts, laws, customs, and habits.

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A systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe.