Assume That Widgeon Produced Enough Product with the Highest Contribution

question 52

Multiple Choice

Assume that Widgeon produced enough product with the highest contribution margin per unit to use 1,000 hours of machine time.Product demand does not warrant any more production of that product.What is the maximum additional contribution margin that can be realized by utilizing the remaining 1,000 hours on the product with the second highest contribution margin per hour?

• A)$35,000
• B)$1,400
• C)$4,000
• D)$28,000

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Definitions:

Pizza

A popular dish of Italian origin consisting of a usually round, flattened base of leavened wheat-based dough topped with tomatoes, cheese, and often various other ingredients.

Weak Axiom

A principle in consumer choice theory stating that if a consumer prefers bundle A over bundle B when both are available, then the consumer should not prefer B over A when prices change but A and B remain affordable.

Revealed Preferences

A theory that determines preferences by observing consumer choices and behaviors rather than asking them directly.

Francs

A currency formerly used in France and other countries, replaced by the euro in many areas.