In the case study in the text involving calculator production, the fact that each calculator produced added $10.30 to cost and $12 to revenue made clear the value of ____ in determining whether or not to suspend production.
A)average fixed cost
B)cost saving
C)marginal analysis
D)the level of fixed cost

Question

Quizplus · Accepted Answer

Marginal analysis is the process of analyzing the additional costs and benefits of producing one more unit of a product. In this case study, the fact that each calculator produced added $10.30 to cost and $12 to revenue indicates that producing one more calculator would result in a net benefit of $1.70. Therefore, by using marginal analysis, the company can determine whether or not it is financially feasible to continue producing calculators.

In the Case Study in the Text Involving Calculator Production