Use the following information for the next 3 questions.
Ricardo Company has three products, A, B, and C. The following information is available:
-Under the general decision rule for relaxing a constraint, managers are willing to pay
A) Only what they pay now
B) Up to the entire contribution margin per unit of constrained resource
C) What they pay now plus some or all of the contribution margin per constrained resource
D) Less than what they pay now

Question

Use the following information for the next 3 questions.
Ricardo Company has three products, A, B, and C. The following information is available: 
-Under the general decision rule for relaxing a constraint, managers are willing to pay
A) Only what they pay now 
B) Up to the entire contribution margin per unit of constrained resource 
C) What they pay now plus some or all of the contribution margin per constrained resource 
D) Less than what they pay now

Quizplus · Accepted Answer

Managers are willing to pay what they currently pay plus some or all of the contribution margin per constrained resource, as this reflects the additional value gained from relaxing the constraint.

Use the Following Information for the Next 3 Questions