Kinsi Corporation manufactures five different products. All five of these products must pass through a stamping machine in its fabrication department. This machine is Kinsi's constrained resource. Kinsi would make the most profit if it produces the product that:
A) uses the least amount of stamping time.
B) generates the highest contribution margin per unit.
C) generates the highest contribution margin ratio.
D) generates the highest contribution margin per stamping machine hour.

Question

Quizplus · Accepted Answer

Since the stamping machine is Kinsi's constrained resource, the company should prioritize producing the product that generates the highest contribution margin per stamping machine hour. This will ensure that the company is making the most profit with the limited resource available.

Kinsi Corporation Manufactures Five Different Products