Answer the following statements true (T) or false (F)

1) Fixed costs are relevant to a special pricing decision if they are subject to change as a result of the special order.
2) Assuming there are no other significant considerations, a product line with a negative contribution margin should be dropped.
3) In making product mix decisions, when fixed costs are irrelevant, a company should emphasize the product with the highest contribution margin per unit of the constraint.
4) A constraint is a factor that restricts the production or sale of a product, which varies from company to company.
5) Merchandisers are constrained by the size of their stores, and managers must choose which products to display.


1) TRUE
2) TRUE
3) TRUE
4) TRUE
5) TRUE

Business

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