Post Utme Wellspring University 2024 Commerce Question 37

Practice objective / multiple choice question 37 from the 2024 Post Utme Wellspring University Commerce examination.

Post Utme Wellspring University 2024 Commerce Objective / Multiple Choice
Question 37 POST_UTME_WELLSPRING_UNIVERSITY • 2024 • COMMERCE • objective

A company is considering two different production processes for manufacturing a new product. Process A requires an initial investment of ₦10 million and has a fixed cost of ₦5 million per unit. Process B requires an initial investment of ₦15 million and has a fixed cost of ₦3 million per unit. If the company expects to produce 10,000 units, which process should it choose?

Answer Options

Correct Answer A. Process A, as it has a lower initial investment and fixed cost per unit.
B. Process B, as it has a lower fixed cost per unit and a higher initial investment.
C. Process A, as it has a lower fixed cost per unit and a higher initial investment.
D. Process B, as it has a higher initial investment and a lower fixed cost per unit.
Correct Answer
A
Correct Option:
Process A, as it has a lower initial investment and fixed cost per unit.

About This Question

This is Post Utme Wellspring University 2024 Commerce Question 37. It is one of the objective questions from the 2024 Post Utme Wellspring University Commerce examination.

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