Wendall Company Sells Only One Product at a Regular Price

question 81

Multiple Choice

Wendall Company sells only one product at a regular price of $7.50 per unit.Variable expenses are 60% of sales,and fixed expenses are $30,000.Management has decided to decrease the selling price to $6 in hopes of increasing its volume of sales.What is the contribution margin ratio when the selling price is reduced to $6 per unit?

• A)25%
• B)40%
• C)60%
• D)75%

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Definitions:

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions, fostering innovation and problem-solving.

Intrinsic Motivation

The drive to perform an activity for its inherent satisfaction or pleasure, rather than for some separable consequence.

Creativity

The ability to generate novel and valuable ideas or solutions to problems.