When resources like direct materials,labor,or time are scarce,the goal is to maximize the contribution margin per unit of scarce resource.

Question

Quizplus · Accepted Answer

When resources are scarce, the company must make the most efficient use of them to maximize profits. This is done by calculating the contribution margin per unit of the scarce resource, which is the amount of revenue earned beyond the variable costs of producing one unit. By choosing to produce and sell products that have the highest contribution margin per unit of scarce resource, the company can maximize its profitability. Therefore, the statement is true.

When Resources Like Direct Materials,labor,or Time Are Scarce,the Goal Is