Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest:

Question

Quizplus · Accepted Answer

Companies with production constraints and irrelevant fixed costs should focus on maximizing production of the product with the highest contribution margin per unit of the constraint. This is because the production constraint limits the overall production capacity, and maximizing the contribution margin per unit of the constrained product will lead to the highest profit margin. Therefore, option D is the most profitable choice for these companies.

Companies with Production Constraints and Irrelevant Fixed Costs Will Be