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NEW QUESTION: 1
Data regarding four different products manufactured by an organization are presented as follows. Direct material and direct labor are readily available from the respective resource markets.
However, the manufacturer is limited to a maximum of 3,000 machine hours per month.

Units Produced per Machine Hour: A: 3 B: 4 C: 2 D: 3
The product that is the most profitable for the manufacturer in this situation is
A. Product D
B. Product C
C. Product A
D. Product B
Answer: D
Explanation:
Answer (B) is correct. When resources are limited, maximum profits are achieved by maximizing the dollar contribution margin per limited or constraining factor. In this situation, machine hours are the constraining factor. Product B has a contribution margin per machine hour of US $28 [A x (US $18 - $11)], which is greater than that of Product A [3 x (US $15 - $7) = US $24], Product C [2 x (US $20 - $10) = US $20], or Product D [3 x (US $25 - $16) = US $27].


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C_S4CPS_2005 SAP Certified Application Associate - SAP S/4HANA Cloud - Professional Services Implementation

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