When there is a production constraint,a company should emphasize the products with:
A)the highest unit contribution margins.
B)the highest contribution margin ratios.
C)the highest contribution margin per unit of the constrained resource.
D)the highest contribution margins and contribution margin ratios.

Question

Quizplus · Accepted Answer

When there is a production constraint, the company should focus on producing products that generate the highest contribution margin per unit of the constrained resource. This is because the company can generate the most profit by using the constrained resource efficiently. Emphasizing products with the highest unit contribution margins or contribution margin ratios may not necessarily be the most profitable if they do not utilize the constrained resource efficiently. Therefore, the best choice is to emphasize products with the highest contribution margin per unit of the constrained resource.

When There Is a Production Constraint,a Company Should Emphasize the Products