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A firm uses activity-based costing. Its activity rates are as follows. $100 per machine hours, $500 per batch start, $5 per order The firm produces
A firm uses activity-based costing. Its activity rates are as follows. $100 per machine hours, $500 per batch start, $5 per order The firm produces several products. Two of these products have the following data Product 1: $44,000 revenue, $10,000 direct costs, 50 machine hours, 5 batch starts, 100 orders Product 2: $46,000 revenue, $20,000 direct costs, 20 machine hours, 8 batch starts, 200 orders The firm's product sales mix is 3:1 for product 1 and 2, respectively Which of these re-mixes is LEAST profitable to the firm? (Assume the same number of bundles would be sold.) a. The firm's new product sales mix is 4:0 for product 1 and 2, respectively b. The firm's new product sales mix is 0:4 for product 1 and 2, respectively c. The firm's new product sales mix is 1:3 for product 1 and 2, respectively d. The firm's product sales mix stays at 3:1 for product 1 and 2, respectively (i.e. the current product sales mix)
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