In Making Product Mix Decisions,when Fixed Costs Are Irrelevant,a Company

question 97

True/False

In making product mix decisions,when fixed costs are irrelevant,a company should emphasize the product with the highest contribution margin per unit of the constraint.

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Definitions:

Preferred Dividends

The dividends that are allocated and paid to preferred shareholders before any dividends can be distributed to common shareholders.

Retained Earnings

The portion of net income not distributed as dividends to shareholders, but instead reinvested in the company or kept as reserve.

Plant & Equipment, Net

The net book value of physical assets used in operations, after accounting for depreciation and disposals.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of the business, whichever is longer.