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Superbowl Corporation Manufactures Two Products,Footballs and Helmets

question 7

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Superbowl Corporation manufactures two products,Footballs and Helmets.The following annual information was gathered: Superbowl Corporation manufactures two products,Footballs and Helmets.The following annual information was gathered:   Total annual fixed costs are $25,000.Assume Superbowl Corporation can sell either 8,000 footballs or 18,000 helmets at full capacity.Which product should Superbowl Corporation sell to maximize profits? A) Footballs because the contribution margin per unit is higher B) Helmets because the total units sold is higher C) Helmets because the total contribution margin is higher D) Footballs because the sales price per unit is higher Total annual fixed costs are $25,000.Assume Superbowl Corporation can sell either 8,000 footballs or 18,000 helmets at full capacity.Which product should Superbowl Corporation sell to maximize profits?

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Definitions:

Product Variety

The range of different products or services offered by a company or available in a market.

Cost Economies

Refers to economies of scale where the average cost per unit of production decreases as the volume of production increases.

Horizontal Differentiation

Products differ in ways that make them better for some people and worse for others.

Vertical Differentiation

A product difference that, from everyone’s perspective, makes a product better than rival products.

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