A company that is operating at full capacity should emphasize those products and services that have the:
A)lowest total per-unit costs.
B)highest contribution margin per unit.
C)highest contribution margin per unit of scarce resource.
D)highest operating income.
E)highest sales volumE.

Question

Quizplus · Accepted Answer

When a company is operating at full capacity, it means that its scarce resources, such as production time or raw materials, are fully utilized. Therefore, the company should emphasize products or services that generate the highest contribution margin per unit of that scarce resource, as this will result in the highest profit per unit of scarce resource invested. Choices A, B, D, and E do not take into account the scarcity of resources, and may not lead to the most profitable outcome for a company operating at full capacity.

A Company That Is Operating at Full Capacity Should Emphasize