1. In the 'Real life' titled 'Ticket pricing in the Australian Football League' in the section 'Pricing strategies', the AFL's variable ticket pricing strategy was discussed. Explain why this is an example of value-based pricing.

2.

West1 West2 Unit sales price $13.00 $31.00 Less Direct material 7.00 5.00 Direct labour 1.00 6.00 Variable overhead 1.25 7.50 Variable selling and administrative costs 0.75 0.50 Unit contribution margin $ 3.00 $12.00 ArchoChem's production process uses highly skilled labour, which is in short supply. The same employees work on both products and earn the same wage rate of $21 per hour. Required: Which of ArchoChem's products is the more profitable? Explain