The Contribution Margin Per Unit of Constraint Is Calculated as

question 264

Multiple Choice

The contribution margin per unit of constraint is calculated as

• A) contribution margin per unit × units per constraint.
• B) contribution margin per unit × constraint per unit.
• C) contribution margin per unit/units per constraint.
• D) contribution margin per unit + constraint per unit.

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Definitions:

Fixed Cost

Expenses that do not change in relation to production volume, such as rent, salaries, and insurance premiums.

Theory of Constraints

A methodology that focuses on identifying and managing the most significant limiting factor (constraint) that stands in the way of achieving a goal.

Recognizing Constraints

The process of identifying and acknowledging the limitations or restrictions that impact the efficiency and effectiveness of a system, project, or process.

Managing Constraints

The methodical process of identifying, analyzing, and addressing limitations that hinder achieving objectives in operations or projects.