The contribution margin per unit of constraint is calculated as
A)contribution margin per unit × constraint per unit.
B)contribution margin per unit × units per constraint.
C)contribution margin per unit ÷ units per constraint.
D)contribution margin per unit + constraint per unit.

Question

Quizplus · Accepted Answer

Contribution margin per unit needs to be multiplied by the number of units the constraint can produce in order to calculate the total contribution margin per unit of constraint. This is because the constraint limits the number of units that can be produced and therefore the contribution margin for each unit produced by the constraint is different.

The Contribution Margin Per Unit of Constraint Is Calculated as