We have shown in this module that poor decision making may result when acceptable prices are determined by adding a fixed percentage to the "full cost" of a product when that "full cost" includes a unitized fixed cost. The lesson in the module is that any selling price above the contribution margin will add to the wealth of the firm. This being the case, is there a danger in the decision rule that states "always accept any offer that has a positive contribution margin?"

I, and others would be happy to comment on this for you.

However, first, please make an attempt at your own homework and post back here what you think the answer is and why.

We will look over your answer, and offer other comments as well.

You could have at least tried to disguise it as not homework, but this is obviously lifted from your question sheet word for word :)

At least you're honest ;)