Farris Company Reported the Following Information for Its Two Products

question 123

Multiple Choice

Farris Company reported the following information for its two products: $$\begin{array} { l c c } & \text { Product X } & \text { Product } Y \\\text { Selling price per unit } & \$ 2 5 &\$3 5\\\text { Variable cost per unit } & 15 & 20\end{array}$$ Due to labor constraints,demand for each of the products is greater than its supply.Product X requires one hour of labor to produce and product Y requires three hours of labor to produce.Which of the following statements is true?

• A) Product X should be produced and sold because it has a lower cost than Product Y.
• B) Product X should be produced and sold because it provides a higher contribution margin per labor hour than Product Y.
• C) Product Y should be produced and sold because it provided a higher contribution margin per unit than Product X.
• D) Product Y should be produced and sold because it provides more revenue than Product X.

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Definitions:

Empirical

Hinges on, is aimed at, or can be corroborated by direct evidence from observations or experiential learning, rather than conjectural theory or logic-based assumptions.

Emotion

A complex psychological state that involves an experience, physiological arousal, and expressive behaviors, often influenced by thoughts and environment.

Happiness

A state of well-being and contentment, often associated with feelings of joy or fulfillment.

Evolutionary Theories

A set of principles aimed at explaining how evolutionary processes, such as natural selection, have shaped behaviors, physical traits, and psychological traits over time.