Question

Kinsi Corporation manufactures three different products. All five of these products must pass through a stamping machine in its fabrication department. This machine is Kinsi's constrained resource. Kinsi would make the most profit if it produces the product that:

A. uses the lowest number of stamping machine hours.
B. generates the highest contribution margin per unit.
C. uses the highest number of stamping machine hours.
D. generates the highest contribution margin per stamping machine hour.

Answer 1

Answer:

D.

Explanation:

Based on the information provided within the question it can be said that the Kinsi would make the most profit if it produces the product that generates the highest contribution margin per stamping machine hour. In other words producing products that provide higher profits after discounting all the costs associated with production, for every machine hour of stamping.