If demand is the limiting factor,and there are no other scarce resources,managers should emphasize the product with ________.
A) the highest selling price per unit
B) the lowest variable costs per unit
C) the highest contribution margin per unit
D) the highest contribution margin per hour

Question

Quizplus · Accepted Answer

If demand is the limiting factor, it means that the company cannot produce enough to meet the demand, hence the focus should be on maximizing the contribution margin per unit to maximize profitability. The contribution margin per unit is the amount of revenue that each unit of product contributes towards covering the fixed costs and generating profit after deducting the variable costs. Therefore, managers should emphasize the product with the highest contribution margin per unit.

If Demand Is the Limiting Factor,and There Are No Other