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AP Business with Personal Finance: Product Life Cycle Drill (Drill 11)

Drill 11 ·

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About This Drill

AP Business with Personal Finance: Product Life Cycle Drill (Drill 11) is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.

A product life cycle and product line drill set for AP Business with Personal Finance; uses an invented company and original figures.

Passage

Saffronbrook Tea & Spice sells four loose-leaf tea blends through its online store. The owner is reviewing where each blend sits in its product life cycle so she can decide where to put next year's marketing budget. The table below shows each blend's life-cycle stage, its annual unit sales, and its gross margin per unit.

Saffronbrook Tea & Spice: Blend Portfolio (most recent year)

BlendLife-cycle stageAnnual unit salesGross margin per unit
Morning AmberMaturity9,200$4.00
Spiced HarvestGrowth6,500$3.50
Evening CalmIntroduction1,400$3.00
Garden MintDecline2,800$2.50

Rounding: report all dollar amounts to the nearest whole dollar.

Questions in This Drill

  1. Which blend has the highest annual unit sales?
  2. Evening Calm was launched recently and has low sales that are only beginning to rise. Which product life cycle stage best describes Evening Calm?
  3. What is the total annual gross margin contributed by Spiced Harvest (gross margin per unit times annual unit sales)?
  4. Garden Mint's sales have been falling for two straight years even though its quality has not changed. Which reasoning best explains why a blend in the decline stage tends to lose sales?
  5. The owner wants to put next year's marketing dollars behind the blend with the best chance to grow total gross margin, not just hold steady. Based on the table, which action best fits that goal?