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Product Decisions

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Sports Company makes 2 products, footballs and baseballs. Additional information follows:

Footballs Baseballs
Units 4,000 2,500
Sales $60,000 $25,000
Variable costs 36,000 7,000
Fixed costs 9,000 9,000
Net income $15,000 $9,000

Profit per unit $3.75 $3.60

If Sports has unlimited demand for both products, which product should Sports Company emphasize?

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Response discusses the steps to evaluate product decisions.

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If Sports has unlimited demand for both products, which product should Sports Company emphasize?

For this we should calculate Contribution Margin ...

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