Question
The following information is provided for two products: Product X Product Y Selling price per unit $35 $25 Variable cost per unit 20 15 Assume
The following information is provided for two products: Product X Product Y Selling price per unit $35 $25 Variable cost per unit 20 15
Assume the products will be sold in a store where shelf space is a scarce resource and there is sufficient room for only one of the two products. Expected sales for Product X are 6,000 units, and expected sales for Product Y are 8,000 units. Which product should be sold and why?
A) Product Y should be sold solely because the expected demand for this product is greater than the expected demand for Product X. B) Product Y should be sold because sales of this product will provide a greater profit. C) Product X should be sold because it provides a greater contribution margin per unit. D) Product X should be sold because sales of this product will provide a greater profit.
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