When multiple products share a constrained resource, the way to allocate the resource is to compute the
A)contribution per unit.
B)contribution margin per constrained resource.
C)opportunity cost per unit.
D)profit per unit.

Question

Quizplus · Accepted Answer

When multiple products share a constrained resource, the best way to allocate the resource is to compute the contribution margin per constrained resource. This allows the manager to see which product generates the highest contribution margin per unit of constrained resource and allocate the resource accordingly. This approach ensures that the resource is used efficiently and maximizes the overall profitability of the product mix.

When Multiple Products Share a Constrained Resource, the Way to Allocate