To increase the margin between selling price and manufacturing cost, a manufacturing company might:
A)negotiate a lower purchase price with suppliers of raw materials.
B)substitute more efficient manufacturing equipment for work now done by employees.
C)increase selling prices.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Option A, negotiating lower purchase price with suppliers of raw materials, will reduce the cost of manufacturing and thus increase the manufacturing margin. Option B, substituting more efficient manufacturing equipment for work now done by employees, will increase production efficiency and reduce labor costs, thereby increasing the manufacturing margin. Option C, increasing selling prices, will directly increase the margin between selling price and manufacturing cost. Therefore, all the options given (A, B, and C) will help increase the margin, making D the correct answer.

To Increase the Margin Between Selling Price and Manufacturing Cost