Question

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 a high level of sunk costs. has capacity constraints in the form of limited resources. has excess capacity. has a high fixed-cost structure.

Answer 1

Has capacity constraints in the form of limited resources

Step-by-step explanation:

When the company has capacity constraints in the form of limited resources they should prioritize those goods with highest contribution margin per unit of the limiting factor instead of goods with the highest contribution margin per unit. This ensures that resources are distributed first to where they are more profitable.

Therefore, A firm that decides to emphasize those goods with the highest contribution margin per unit may have made an incorrect decision when the company has capacity constraints in the form of limited resources.