In a multiple-product firm,the product that has the highest contribution margin per unit will
A)generate more profit for each $1 of sales than the other products.
B)have the highest contribution margin ratio.
C)generate the most profit for each unit sold.
D)have the lowest variable costs per unit.

Question

Quizplus · Accepted Answer

The product with the highest contribution margin per unit will generate the most profit for each unit sold because the contribution margin is the difference between the selling price per unit and the variable cost per unit. This directly impacts the profit generated from each unit sold, independent of the total sales value or the variable cost per unit itself.

In a Multiple-Product Firm,the Product That Has the Highest Contribution