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

A company currently sells product A, B and C in equal quantities and at the same selling price per unit. The contribution margin ratio for product A is 40%, for product B is 50%, and the overall contribution margin ratio for the company is 48%. Suppose that the sales mix changes to 40% A, 25% B, and 35% C, what would be the new overall contribution margin ratio for the company?*

a. 27.5%

b. 45.3%

c. 47.4%

d. 68.4%

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

Miguel Corporation budgets fixed expenses of Php250,000: variable expenses of Php180,000 and a sale of 15,000 units for Php28 each. If the Company could increase its selling price by Php2 each and decrease its variable expenses to Php150,000, the number of units to be sold in order to breakeven would be*

a. 12,500 units

b. 13,889 units

c. 12,863 units

d. 14,463 units