If the limiting factor is demand and there are no scarce resources,managers should emphasize the product with ________.
A)the highest selling price per unit
B)the lowest variable costs per unit
C)the highest contribution margin per unit
D)the lowest fixed costs per unit

Question

Quizplus · Accepted Answer

If demand is the limiting factor and there are no scarce resources, managers should focus on maximizing their contribution margin per unit. The contribution margin represents the amount of money left over after covering the variable costs, and it can be used to cover fixed costs and generate profit. Therefore, the product with the highest contribution margin per unit would have the greatest impact on profitability. Selling price per unit, variable costs per unit, and fixed costs per unit are important considerations but not as critical as contribution margin per unit in this scenario.

If the Limiting Factor Is Demand and There Are No