In Making Product Mix Decisions Under Constraining Factors,which of the Following

question 111

Multiple Choice

In making product mix decisions under constraining factors,which of the following is the key to choosing the product type to be maximised?

• A) Contribution margin per unit of the constraining factor
• B) Gross profit per unit using absorption costing
• C) Contribution margin per unit of product
• D) Revenue per unit

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Definitions:

Average Product

The output per unit of a particular input, such as labor or capital, calculated by dividing total product by the quantity of input.

Average Product

The output produced per unit of input used, typically calculated by dividing total product by the quantity of input.

Marginal Product

The additional output gained by employing one more unit of a particular input, keeping other inputs constant.

Complementary Inputs

Inputs used in production that are used together with other inputs to increase output, for instance, coffee and milk in a café.