Sophamia Company sells five products, as follows. Product A: Price per unit, $10
ID: 2498389 • Letter: S
Question
Sophamia Company sells five products, as follows.
Product A: Price per unit, $100 -- Variable cost per unit, $40 -- 3 machine hours required
Product B: Price per unit, $80 -- Variable cost per unit, $50 -- 2 machine hours required
Product C: Price per unit, $120 -- Variable cost per unit, $30 -- 5 machine hours required
Product D: Price per unit, $90 -- Variable cost per unit, $60 -- 1 machine hour required
Product E: Price per unit, $150 -- Variable cost per unit, $110 -- 4 machine hours required
Because of a delay in the delivery of new production machines, during the current year the scarce resource in Sophamia Company is MACHINE HOURS. Which product should the company emphasize in its marketing campaign?
Product E
Product A
Product B
Product C
Product D
Product E
Product A
Product B
Product C
Product D
Explanation / Answer
Answer : Company should emphasized on Product 'D' in its Marketin campagin.
Contribution
(C) =(A)-(B)
Machine Hours
(D)
Contribution Per hour
(E)= (C)/(D)
Product Sale Price (A) Variable cost (B)Contribution
(C) =(A)-(B)
Machine Hours
(D)
Contribution Per hour
(E)= (C)/(D)
A 100 40 60 3 20 B 80 50 30 2 15 C 120 30 90 5 18 D 90 60 30 1 30 E 150 110 40 4 10Related Questions
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