When capacity is limited, which of the following are alternative courses of action to consider?
A)Produce the items with the largest contribution margin per unit of capacity.
B)Purchase some components from outside suppliers.
C)Produce the items with the largest selling price to maximize revenue.
D)A and B only.
E)A, B and ؤ

Question

Quizplus · Accepted Answer

When capacity is limited, it is important to make the most of available resources. Option A suggests producing items with the largest contribution margin per unit of capacity, which would help maximize profit. Option B suggests purchasing components from outside suppliers, which would help increase production capacity. Therefore, options A and B would be the best choice. Option C suggests producing items with the largest selling price to maximize revenue, but this might not necessarily result in the highest profit if capacity is limited. Hence, option C can be disregarded.

When Capacity Is Limited, Which of the Following Are Alternative