Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 11 - Decision Making and Relevant Information - Assignment Material - Questions - Page 458: 11-10

Answer

I agree with the statement. When managing resources and production, it's important to focus on maximizing the contribution margin per unit of the constraining factor. This ensures that resources are utilized efficiently, and the company can make the most of its limited resources, such as machine hours, to generate the highest profit. Simply maximizing sales of a product with the highest contribution margin per unit may not be effective if other constraints prevent its production or sale.

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