Company XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Basic calculators. What would be the effect on total profits? O a. Total profits would decrease O b. Total profits would remain the same OC. Cannot be determined using the above information O d. None of the given answers O e. Total profits would increase

Company XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Basic calculators. What would be the effect on total profits? O a. Total profits would decrease O b. Total profits would remain the same OC. Cannot be determined using the above information O d. None of the given answers O e. Total profits would increase

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company XYZ produces and sells two types of calculators : Basic and Scientific The Basic has a lower selling price per unit compared to the Scientific . However , the Basic has a higher contribution margin compared to the Scientific . Due to fixed production capacity , the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Scientific calculators . What would be the effect on total profits? a. None of the given answers b . Cannot be determined using the above information c.Total profits would increase d. Total profits would remain the same e. Total profits would decrease
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