THANK you 4 Mona sells two prpducts at her store that both take the same amount

Question

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4 Mona sells two prpducts at her store that both take the same amount of time to produce. 4 Product Y has a high contribution margin and high turnover rate Product Z has a low contribution margin and a high turnover rate. Which product should Mona dedicate the most resources to? C A: product Z, because it will yield the greatest increase in net income B product Y, because it will yield the greatest increase in net income C: product Z, because it will produce the greatest decrease in her variable expenses D: product Y, because it will produce the greatest decrease in her variable expenses

Explanation / Answer

Ans - Option B : Product Y, Because it will yield the greatest increase in net income.

For ex: if there is 0 fixed cost then the contribution of Y product would be highest and if fixed cost element is exist there still the net profit would be highest as contribution is the highest.

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