Which is the approach to take in the short-run when considering the most efficient sales mix where there is a limiting factor?

Question

Quizplus · Accepted Answer

When there is a limiting factor, the most efficient sales mix can be determined by comparing the contribution margin per unit of the limiting factor for each alternative. This approach helps in identifying the alternative that generates maximum contribution margin for each unit of the limiting factor. Hence, option C is the correct approach to take in the short-run when considering the most efficient sales mix where there is a limiting factor. Options A, B, and D may be relevant in other contexts but are not the most effective in situations where there is a limiting factor.

Which Is the Approach to Take in the Short-Run When