he Company currently operates by selling 9 Million Standard Boxes and 1.5 Million Deluxe Boxes per month. The CEO is convinced that under the current cost allocation which allocates fixed costs on a lump sum method (arbitrarily using a monthly allocation basis) , Deluxe boxes is not contributing much to company profit and with recent threats from environmental groups thinks that LGI should consider to no longer produce Deluxe Boxes.

Answer rating: 100% (QA)

Based on the information provided the CEOs concern regarding the profitability of Deluxe Boxes and the potential environmental threats the company sho... View the full answer