With a constraining resource,which product should a manager select to emphasise?
A)Highest gross profit
B)Highest contribution margin per unit of the constraining resource
C)Lowest contribution margin per unit of the constraining resource
D)Highest sales price

Question

Quizplus · Accepted Answer

When there is a constraining resource, the best choice is to select the product with the highest contribution margin per unit of the constraining resource. This means that for each unit of the limited resource used, the product will generate the highest amount of profit. This allows for optimal use of the limited resource and maximizes overall profitability.

With a Constraining Resource,which Product Should a Manager Select to Emphasise