NEKP Inc.sells two versions of its product, standard and deluxe.The standard model has a 15 percent profit margin and the deluxe model has a 17 percent profit margin.The standard model has a 30 percent contribution margin and the deluxe has a 23 percent contribution margin.If other factors are equal, which product should NEKP emphasize to its customers?

Question

Quizplus · Accepted Answer

The standard model has a higher contribution margin (30%) compared to the deluxe model (23%), which means it contributes more to covering fixed costs and generating profit per unit sold.

NEKP IncSells Two Versions of Its Product, Standard and Deluxe