1. What should a firm faced with a production constraint do to maximize total contribution margin? a) Promote those products having the highest unit contribution margins. b) Promote those products having the highest contribution margin ratios. c) Promote those products having the highest contribution margin per unit of constrained resource. d) Promote those products having the highest contribution margins and contribution margin ratios. What is the opportunity cost of making a component part in a factory with no excess capacity? a) Variable manufacturing cost of the component. b) Fixed manufacturing cost of the component. c) Cost of the production given up in order to manufacture the component. d) Net benefit foregone from the best alternative use of the capacity required. Relay Corporation manufactures batons. Relay can manufacture 300,000 batons a year at a variable cost of $750,000 and a fixed cost of $450,000. Based on Relay's predictions for next year, 240,000 batons will be sold at the regular price of $5.00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company's operating income be increased or decreased as a result of the special order? a) $30,000 increase. b) $36,000 increase. c)$60,000 decrease. $180,000 increase. Walsh Company expects sales of Product W to be 60,000 units in April, 75,000 units in May, and 70,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales. Due to excessive production during March, there were 25,000 units of Product Win the ending inventory on March 31. Given this information, what should be Walsh Company's production of Product W for the month of April? 60,000 units. b) 65,000 units. c)66,000 units. 75,000 units. When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred, what is the lowest acceptable transfer price as far as the selling division is concerned? Variable cost of producing a unit of product. b) The full absorption cost of producing a unit of product. c) The market price charged to outside customers, less any costs saved by transferring internally. The amount that the purchasing division would have to pay an outside seller to acquire a similar product for its use