Multiple Choice
Marsha Marsh is going to sell Christmas tree lights for $20 a box.The lights cost Marsha $5 a unit and any unsold lights can be returned for a full refund.She is planning to rent a booth at the upcoming Baggy Green's Christmas Convention,which offers three options:
1.paying a fixed fee of $1500,or
2.paying a $500 fee plus 10% of revenues made at the convention,or
3.paying 25% of revenues made at the convention.
Which of the following statements is FALSE?
A) Contribution margin will vary depending upon the option chosen.
B) One of the options will allow Marsha to break even,even if she doesn't sell any lights.
C) Operating profit will be the greatest for Option 3.
D) Her decision will determine the risk she faces.
Correct Answer:
Verified
Correct Answer:
Verified
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