A company that has a constraint and produces multiple products should emphasize the production of the product that has the
A)highest sales price per unit.
B)highest contribution margin per unit.
C)highest contribution margin per unit of constraint.
D)most unit sales out of all the products.

Question

Quizplus · Accepted Answer

When a company has a constraint, it means that it has a limited resource or capacity that restricts the amount of products that can be produced. To maximize profits, the company should emphasize producing the product that generates the highest contribution margin per unit of constraint. This means that the company should focus on the product that generates the highest profit margin for each unit of the limited resource or capacity. This allows the company to make the most efficient use of its resources and earn the highest profits possible. Hence, option C is the best choice.

A Company That Has a Constraint and Produces Multiple Products