1. Due to change in market conditions a company finds that it can sell as many of each of its three main products as it can produce. Which one of the following is most important in determining which of the three products to produce and market? * a. Sales price per unit b. Contribution margin per unit c. Contribution margin per hour of production time available d. Sales price less full absorption cost per hour of production time available
1. Due to change in market conditions a company finds that it can sell as many of each of its three main products as it can produce. Which one of the following is most important in determining which of the three products to produce and market? *
a. Sales price per unit
b. Contribution margin per unit
c. Contribution margin per hour of production time available
d. Sales price less full absorption cost per hour of production time available
2. In analyzing CVP, the margin of safety is
a. Only expressed in peso amounts
b. The difference between the breakeven sales and the fixed cost
c. The amount of sales which may be reduced without resulting to a loss
d. An amount which shows how much profit a company has past the breakeven point
3. Once a firm exceeds the indifference point, between an option to invest in machinery and equipment (highly automated) and an option to invest in manual labor (manual), which is true? *
a. Fixed costs will be the same in two options
b. Investing in labor would be more profitable
c. Variable costs will be the same in the two options
d. Investing in machinery and equipment would be more profitable
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