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When capacity is limited, which of the following is an alternative course of action to consider? a) Produce the items with the largest contribution margin

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When capacity is limited, which of the following is an alternative course of action to consider? a) Produce the items with the largest contribution margin per unit of capacity b) Purchase some components from outside suppliers c) Produce the items with the largest selling price to maximize revenue d) A & B only When management must decide whether to offer special promotions in order to reduce excess inventory, which of the following is not relevant? a) The cost of offering the promotion b) The selling price of the product during the promotion c) The unit product cost of the inventory being sold d) The regular selling price of the product when a special promotion is being offered What is the primary purpose for which the firm performs CVP analysis? a) Calculating measures that help assess operating risk b) Evaluating the profit impact of short term decision alternatives c) Profit planning d) All of the above A company can achieve an increase in contribution margin (given no other changes) if a) Fixed costs decrease b) Selling price decreases c) Fixed costs increase d) Variable costs decrease

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