The same constrained resource is used by four different products at Rodrigez Corporation. Data concerning those products appear below: $\begin{array}{lrrr}
&Z 100 & Z 200 & Z 300 & Z 400 \
\text { Unit selling price }&\$ 31.80 & \$ 29.60 & \$ 15.90 & \$ 35.80 \
\text { Unit variable cost }&\$ 15.90 & \$ 6.80 & \$ 3.00 & \$ 24.30 \
\text { Amount of the constrained resource required. }&0.44 & 0.34 & 0.28 & 0.53
\end{array}$ The company does not have enough of the constrained resource to satisfy for demand of all four products. From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?
A)Z300
B)Z400
C)Z200
D)Z100

Question

Quizplus · Accepted Answer

To determine which product to emphasize, calculate the contribution margin per unit of constrained resource for each product. Z200 has the highest contribution margin per unit of constrained resource, making it the most profitable choice.

The Same Constrained Resource Is Used by Four Different Products