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Bjax Corporation has a separate production line for each of two products: A and B. Product A has a contribution margin of $4 per unit,

Bjax Corporation has a separate production line for each of two products: A and B. Product A has a contribution margin of $4 per unit, Product B has a contribution margin of $5 per unit, and the corporation's nonvariable expenses of $200,000 are unchanged regardless of volume. Under these conditions, which of the following statements will always be applicable?

  • A.
  • Income will be maximized if B only is sold.
  • B.
  • The contribution margin per unit of direct materials is lower for A than for B.
  • C.
  • At a sales volume in excess of 25,000 units of A and 25,000 units of B, operations will be profitable.
  • D.
  • The ratio of net profit to total sales for B will be larger than for A.

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