Bates Company Plans to Add a New Item to Its

question 56

Multiple Choice

Bates Company plans to add a new item to its line of consumer product offerings.Two possible products are under consideration.Each unit of Product A costs $6 to produce and has a contribution margin of $3,while each unit of Product B costs $12 and has a contribution margin of $4.What is the differential revenue for this decision?

• A) $7
• B) $1
• C) $6
• D) $9

---

Definitions:

Geographical Regions

Spatial areas on the Earth's surface that are demarcated by natural or administrative boundaries and often grouped by common physical, cultural, or economic characteristics.

Division Contribution

The specific input or impact that a particular division, department, or group within an organization has towards achieving its overall objectives.

Sales Volume

The quantity of products or services sold within a given period.

Bar Chart

A graphical representation of data using rectangular bars to show the comparative size of various values.