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When operating in a constrained environment, which products should be produced? A.Products with the lowest allocated...

When operating in a constrained environment, which products should be produced?

A.Products with the lowest allocated joint cost

B.Products with the highest contribution margin per unit of the constrained process

C.Products with the highest selling price

D.Products with the highest contribution margin per unit

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Answer #1

Answer:- Option (b) Products with the highest contribution margin per unit of the constrained process.

Explanation- ​​​​​​ When operating in a constrained environment, Products with the highest contribution margin per unit of the constrained process should be produced because when a firm faced with a production constraint should promote those products having the highest contribution margin per unit of constrained process to maximize their total contribution margin. So, we can say that, when there is a production constraint, a company should highlight the products with the highest contribution margin per unit of the constrained process.

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