Management of a Company Is Evaluating Two Potential Orders

question 115

Multiple Choice

Management of a company is evaluating two potential orders. Due to limited capacity only one of these orders can be accepted. Incremental fixed costs are the same for either option. Based on the information in the table below which of the following statements is true?

• A) Option B has the highest contribution margin per unit.
• B) Option A has the highest total contribution margin.
• C) Option B has the lowest contribution margin ratio.
• D) Option B has the highest total contribution margin.
• E) Option A has the highest amount per dollar of sales to contribute to contribution margin and profit.

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Definitions:

High Self-esteem

Refers to an individual's positive evaluation of oneself, characterized by confidence and feeling of self-worth.

Generic Brands

Products marketed without a branded name, often positioned as lower-cost alternatives to well-known brands.

High Ratings

A term used to indicate a positive evaluation or assessment, usually referring to quality, performance, or satisfaction in various contexts (e.g., product reviews, service evaluations).

Need for Closure

A psychological term describing an individual's desire for a clear and definite answer to a question or decision, to avoid ambiguity or uncertainty.