Post Utme Esut 2020 Commerce Question 37

Practice objective / multiple choice question 37 from the 2020 Post Utme Esut Commerce examination.

Post Utme Esut 2020 Commerce Objective / Multiple Choice
Question 37 POST_UTME_ESUT • 2020 • COMMERCE • objective

A company is considering two different production processes to manufacture a product. Process A requires an initial investment of ₦100,000 and has a variable cost of ₦50 per unit. Process B requires an initial investment of ₦150,000 and has a variable cost of ₦30 per unit. If the selling price of the product is ₦120 per unit, which process should the company choose?

Answer Options

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

About This Question

This is Post Utme Esut 2020 Commerce Question 37. It is one of the objective questions from the 2020 Post Utme Esut Commerce examination.

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