The formula for computing the contribution per constrained resource is
A)contribution margin per unit multiplied by the constrained resource per unit.
B)contribution margin per unit divided by the constrained resource per unit.
C)total contribution margin multiplied by the constrained resource per unit.
D)total contribution margin divided by the constrained resource per unit.

Question

Quizplus · Accepted Answer

To determine the contribution per constrained resource, we need to divide the contribution margin per unit by the constrained resource per unit. This will give us the amount of contribution that each unit of the constrained resource generates. By doing this, we can prioritize which products or services to focus on to maximize profits given the limited availability of the constrained resource.

The Formula for Computing the Contribution Per Constrained Resource Is