Morrell Company's Model A generator sells for $569,and Model B sells for $499.The variable cost of Model A is $514 and of Model B is $416.If Morrell sells more of Model B than Model A,it will generate lower revenues,but higher net income.

Question

Quizplus · Accepted Answer

Model B has a higher profit margin ($83) compared to Model A ($55), so selling more of Model B increases net income despite lower revenue.

Morrell Company's Model a Generator Sells for $569,and Model B