Which of the following statements is incorrect?
A) When faced with multiple demands on constrained resources, managers should choose the product that provides the highest unit contribution margin.
B) Constraints are limitations on a company's ability to satisfy demands for its products.
C) Constraints are also referred to as bottlenecks.
D) Managers seek to minimize the impact of bottlenecks on the operations of a business.

Question

Quizplus · Accepted Answer

When faced with multiple demands on constrained resources, managers should choose the product with the highest contribution margin per unit of constrained resource (not necessarily the highest unit contribution margin overall). This is because the goal is to maximize profitability while working within the constraints of limited resources.

Which of the Following Statements Is Incorrect