Constraints are often restrict the amount of productive capacity available to a business, or the potential market for a product, or the availability of particular types of material or labour. In management accounting, such constraints are commonly referred to as:
A) Limiting factors
B) Limiting supply
C) restricting factors
D) Shortages

Question

Quizplus · Accepted Answer

In management accounting, constraints that restrict productive capacity, market potential or availability of resources are called limiting factors. It is the factors that limit the ability of a business to generate revenue, profit or growth. These constraints can be temporary or long-term and may require the business to make strategic decisions in order to overcome them. Therefore, the best choice is A) Limiting factors.

Constraints Are Often Restrict the Amount of Productive Capacity Available