A Firm Sells Two Products, a AndB

question 112

Multiple Choice

A firm sells two products, A andB. For every unit of A the firm sells, two units of B are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. The contribution margin per composite unit is:

• A) $12.
• B) $20.
• C) $32.
• D) $44.
• E) $52.

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Definitions:

Compa-Ratio

An index that indicates how an individual’s or a group’s salary relates to the midpoint of their relevant pay grades.

Piecework

A type of incentive system that compensates workers for each unit of output.

Individual Incentive Plans

Compensation strategies designed to reward employees based on their individual performance and achievements.

Commissions

Earnings based on a percentage of the sales made by an employee or agent, as a form of incentive pay.