When there is one scarce resource, the product that should be produced first is the product with the highest
A)contribution margin per unit of the scarce resource.
B)sales price per unit of the scarce resource.
C)demand.
D)contribution margin per unit.

Question

Quizplus · Accepted Answer

The scarce resource should be allocated towards the product that generates the most profit per unit of the resource used. This is determined by the contribution margin per unit of the scarce resource. Choice A identifies this as the correct criteria for deciding which product to produce first, making it the best choice. Choices B and C do not take into account the contribution margin, which is a crucial factor for profitability. Choice D only looks at contribution margin, but not in relation to the scarce resource, which is also important to consider.

When There Is One Scarce Resource, the Product That Should