A firm has 3 products that it currently offers for sale. Product 1 sells for...
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A firm has 3 products that it currently offers for sale. Product 1 sells for $25/unit and has a variable cost of $11.50/unit. Product 2 sells for $9/unit with variable cost of $3.50/unit. Product 3 sells for $5/unit with variable costs of $2/unit. Fixed costs are $140,000 for Product 1, $45,000 for Product 2 and $25,000 for Product 3. The expected volume for each product is as follows: Product 1 19,000; Product 2 32,000; Product 3 55,000.
a. Which product is more profitable? By how much?
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