1. When constrained by a limiting resource, managers often seek to produce those products which have: a The highest selling prices. a The lowest average cost per unit. b The highest contribution margin per unit of limiting resource. c The highest contribution margin ratios. 2. The average total cost of producing Z-12 is $35 per unit. The average variable cost associated with the production of Z-12 is $12 per unit, of which $2 is manufacturing overhead. The normal selling price of Z-12 is $50 per unit. If excess capacity exists, a special order for Z-12 will increase net operating income if it is priced over at least: a $50 per unit. b $35 per unit. c $12 per unit. d $10 per unit. 3. When deciding whether to make or buy a component part, the most relevant consideration is often: a The average total cost of making the part. b The unavoidable fixed manufacturing costs. c The variable manufacturing costs per unit. d The sunk cost of equipment used to manufacture the part. 4. Products for which sales of one contribute to the sales of another are called: a Complementary products. b Joint products. c Common products. d Dependent products. 5. Opportunity costs represent: a Cash expenditures for business opportunities. b Benefits foregone. c Costs avoided by making a particular decision. d Indirect costs typically classified as manufacturing overhead.