Management should focus its sales and production efforts on the product or products that will provide the
A)highest sales revenue
B)lowest product costs
C)maximum contribution margin
D)lowest direct labor hours

Question

Quizplus · Accepted Answer

The maximum contribution margin is the correct focus because it represents the amount by which the sales of a product exceed its variable costs, thereby contributing to covering fixed costs and generating profit. This approach ensures that management prioritizes products that offer the greatest profitability per unit sold, rather than just high sales volume or low production costs.

Management Should Focus Its Sales and Production Efforts on the Product