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Question: A firm has 3 products that it currently offers for sale. Product 1 sells for $22/unit and has a variable cost of $10/unit. Product 2 sells for $10/unit with variable cost of $4/unit. Product 3 sells for $3/unit with variable costs of $2/unit. Fixed costs are $120,000 for Product 1, $60,000 for Product 2 and $30,000 for Product 3. The expected volume for each product is as follows: Product 1 - 20,000; Product 2 - 35,000; Product 3 - 50,000.
Which product is more profitable? By how much?
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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