Question
Which of the following statements is true? a. To maximize profits under constraints, the product with the lowest contribution margin per unit of the constrained
Which of the following statements is true?
a. | To maximize profits under constraints, the product with the lowest contribution margin per unit of the constrained resource should be given the highest priority. | |
b. | A product whose revenues do not cover its variable costs plus the common costs allocated to it should be discontinued. | |
c. | The opportunity cost of making a product in a factory that has excess capacity for which there is no alternative use is zero. | |
d. | Accepting a special order will improve overall net income if the revenue from the special order exceeds the sunk costs associated with the order.
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