A firm that decides to emphasize those goods with the highest contribution margin per unit may...
A firm that decides to emphasize those goods with the highest contribution margin per unit may have made an incorrect decision when the company:
- is highly automated.
- has excess capacity.
- has capacity constraints in the form of limited resources.
- has a high fixed-cost structure
- has a high level of sunk costs?
Homework Answers
Answer is: C. has capacity constraints in the form of limited resources
When a firm is limited with its resources then use of those resources more effectively should be the goal as emphasizing on higher contribution margin does not helps in the case when the firm has capacity constraints in the form of limited resources
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A firm that decides to emphasize those goods with the highest
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Thanks for the help, and thanks for your time!
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12. What contribution margin per pound of raw material is earned
by each of the two products?
Contribution margin per pound: Alpha Beta
13. Assume that Cane's customers would buy a maximum of 97,000
units of Alpha and 77,000 units of Beta. Also assume that the
company's raw material available for production is limited to
247,000 pounds. How many units of each product should Cane produce
to maximize its profits?
Units produced: Alpha Beta
14. Assume that Cane's customers would...
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Thanks for the help, and thanks for your time!
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