Product 1 Has a Contribution Margin of £6

question 28

Multiple Choice

Product 1 has a contribution margin of £6.00 per unit, and Product 2 has a contribution margin of £7.50 per unit. Total fixed costs are £300,000. Sales mix and total volume varies from one period to another. Which of the following is TRUE?

• A)At a sales volume in excess of 25,000 units of 1 and 25,000 units of 2, operations will be profitable.
• B)The ratio of net profit to total sales for 2 will be larger than the ratio of net profit to total sales for 1.
• C)The contribution margin per unit of direct materials is lower for 1 than for 2.
• D)The ratio of contribution to total sales always will be larger for 1 than for 2.

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Definitions:

With Previous

An option in presentation and animation software that allows an action to start at the same time as the previous action.

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An option in presentation software for triggering an animation effect to start immediately after the previous action or animation.

Compare Command

A command used in computing to identify differences between files, folders, or data sets.

Merge Presentation

The process of combining multiple PowerPoint presentations into one seamless file, often used to consolidate information or collaborative work.