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6. Dye Company can sell all the units it can produ...

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6. Dye Company can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $96 and takes two machine hours to make and Fancy has a unit contribution margin of $120 and takes three machine hours to make. There are 2,400 machine hours available to manufacture a product. What should Dye do? (Points: 2) Make Fancy which creates $24 more profit per unit than Plain does. Make Plain which creates $8 more profit per machine hour than Fancy does. Make Plain because more units can be made and sold than Fancy. The same total profits exist regardless of which product is made. 7. What is the key factor in determining sales mix if a company has limited resources? (Points: 2) Contribution margin per unit of limited resource The amount of fixed costs per unit Total contribution margin The cost of limited resources 8. Cost structure (Points: 2) refers to the relative proportion of fixed versus variable costs that a company incurs. generally has little impact on profitability. cannot be significantly changed by companies. refers to the relative proportion of operating versus nonoperating costs that a company incurs. 9. Reducing reliance on human workers and instead investing heavily in computers and online technology will (Points: 2) reduce fixed costs and increase variable costs. reduce variable costs and increase fixed costs. have no effect on the relative proportion of fixed and variable costs. make the company less susceptible to economic swings. 10. The margin of safety ratio (Points: 2) is computed as actual sales divided by break-even sales. indicates what percent decline in sales could be sustained before the company would operate at a loss.

 

Paper#6552 | Written in 18-Jul-2015

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