Hoop Corporation has four different products that use the same constrained resource. Data concerning those products appear below: $\begin{array}{lrrrr}
&\mathrm{H} 100 & \mathrm{H} 200 & \mathrm{H} 300 & \mathrm{H} 400 \
\text { Unit selling price}&\$ 35.50 & \$ 29.10 & \$ 14.70 & \$ 36.20 \
\text {Unit variable cost }&\$ 15.30 & \$ 7.60 & \$ 3.80 & \$ 23.20 \
\text {Amount of the constrained resource required. }&0.46 & 0.34 & 0.25 & 0.51
\end{array}$ 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)H100
B)H400
C)H300
D)H200

Question

Quizplus · Accepted Answer

The product that should be emphasized is the one with the highest contribution margin per unit of constrained resource. Calculate the contribution margin per unit for each product and divide by the amount of constrained resource required. H200 has the highest contribution margin per unit of constrained resource.

Hoop Corporation Has Four Different Products That Use the Same