The best objective when faced with limited resources is to maximize:
A) the gross profit per unit of the constraining resource.
B) the contribution margin per unit of the constraining resource.
C) production of the product with the highest selling price.
D) production of the product with the highest customer demand.

Question

Quizplus · Accepted Answer

Maximizing the contribution margin per unit of the constraining resource enables the company to earn the highest amount of profit with the resources available. This approach ensures that the limited resources are used in the most efficient way possible, and the company can maximize its profits while minimizing costs. The other options, such as focusing on selling price or customer demand, may not necessarily result in the most profitable outcome when faced with limited resources.

The Best Objective When Faced with Limited Resources Is to Maximize