Company X has two products: Product A and product B. Product A has a higher selling price but a lower contribution margin. Company X has fixed production capacity. If company x decided to change the current product mix by ?producing and selling more units of product A, what would be the effect on Operating Income Cannot be determined a O Operating income would decrease b O Operating Income would increase .c O None of the given answers d O Operating Income would remain the same .e

Company X has two products: Product A and product B. Product A has a higher selling price but a lower contribution margin. Company X has fixed production capacity. If company x decided to change the current product mix by ?producing and selling more units of product A, what would be the effect on Operating Income Cannot be determined a O Operating income would decrease b O Operating Income would increase .c O None of the given answers d O Operating Income would remain the same .e

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 5DQ

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Company XYZ sells two products: AAA and BBB. Product BBB has a lower selling price but higher contribution margin compared to product AAA. Assume that the factory has fixed production capacity. If Company XYZ decided to produce and sell more units of product BBB compared to product AAA, which one of the following is likely to happen? Select one: O a. Total profits will remain the same O b. Total profits will decrease O c. Total profit will increase O d. None of the given answers O e. Total sales will increase
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XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. At the same time, the company plans to decrease the selling price per unit by half. Assuming that the total fixed cost and the variable cost per unit remain unchanged, what would be the effect on profit? O a. Cannot be determined using the information in the question. O b. None of the given answers Oc. Profit would increase O d. Profit would remain unchanged Oe. Profit would decrease
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