Marcus Company gathered the following data about the three products that it produces: Which of the products should not be processed further?
A) Product A
B) Product B
C) Product C
D) Products A and C

Question

Marcus Company gathered the following data about the three products that it produces:  Which of the products should not be processed further?
A) Product A 
B) Product B 
C) Product C 
D) Products A and C

Quizplus · Accepted Answer

Product B has a lower contribution margin per unit compared to its variable costs, indicating that processing it further would decrease profits rather than increase them. Therefore, it should not be processed further. Products A and C have contribution margins per unit that exceed their variable costs, indicating that processing them further would increase profits.

Marcus Company Gathered the Following Data About the Three Products