Post Utme Crawford University 2018 Commerce Question 32

Practice objective / multiple choice question 32 from the 2018 Post Utme Crawford University Commerce examination.

Post Utme Crawford University 2018 Commerce Objective / Multiple Choice
Question 32 POST_UTME_CRAWFORD_UNIVERSITY • 2018 • COMMERCE • objective

A company is considering two different production processes for a new product. Process A has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦120 per unit, which process should the company use?

Answer Options

A. Process A, because it has a lower fixed cost.
B. Process B, because it has a lower variable cost.
Correct Answer C. Process A, because it has a lower total cost.
D. Process B, because it has a higher selling price.
Correct Answer
C
Correct Option:
Process A, because it has a lower total cost.

About This Question

This is Post Utme Crawford University 2018 Commerce Question 32. It is one of the objective questions from the 2018 Post Utme Crawford University Commerce examination.

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