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Point Company sells three different products that are similar, but are differentiated by various product features. Budgeted sales by product and in total for the
Point Company sells three different products that are similar, but are differentiated by various product features. Budgeted sales by product and in total for the coming year are shown below:
Product
Standard
Deluxe
Premium
Total
Percentage of total sales
Sales
$
$
$
$
Less: Variable costs
Contribution margin
$
$
$
$
Less: Fixed expenses
$
Net operating income
$
If customers are indifferent to which of the products to purchase from Point Company, which product line should sales personnel recommend to customers that would most improve overall operating income?
Select one:
A
Product line with the highest sales price
B
Product line with the lowest variable cost
C
Product line with the highest contribution margin ratio
D
Product line with the highest percentage of total budgeted sales
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