When a scarce resource,such as space,exists in an organization,the criterion that should be used to determine production is
A)contribution margin per unit.
B)selling price per unit.
C)contribution margin per unit of scarce resource.
D)total variable costs of production.

Question

Quizplus · Accepted Answer

When a scarce resource exists, it is important to focus on maximizing the contribution margin per unit of that scarce resource. This will ensure that the organization is utilizing the resource efficiently and effectively. Options A and B do not take into account the scarce resource, while option D only focuses on variable costs and not the resource allocation.

When a Scarce Resource,such as Space,exists in an Organization,the Criterion