A firm that decides to emphasize those goods with the highest contribution margin per unit may have made an incorrect decision when the company:

Question

Quizplus · Accepted Answer

When a company has capacity constraints in the form of limited resources, emphasizing goods with the highest contribution margin per unit might not be the best decision. This is because, under constraints, the key factor is the contribution margin per unit of the constrained resource, not per unit of product. This approach ensures the most effective use of limited resources to maximize overall profitability.

A Firm That Decides to Emphasize Those Goods with the Highest