When a company has scarce resources,managers should emphasize the product that has ________.
A)highest contribution margin per unit
B)highest selling price per unit
C)highest contribution margin per unit of the scarce resource
D)highest operating profit per unit

Question

Quizplus · Accepted Answer

When a company has scarce resources, they should prioritize the product with the highest contribution margin per unit of the scarce resource. This ensures that the company is maximizing the utility of its limited resources, as well as generating the most profit per resource unit. Choosing the product based on its selling price or operating profit per unit does not necessarily account for the resource limitations, and may result in inefficient allocation.

When a Company Has Scarce Resources,managers Should Emphasize the Product