Question

Kinsi Corporation manufactures five 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, Generates the highest contribution margin per stamping machine hour

Explanation:

For kinsi corporation to make the most profit, it has to sell the product that has the highest contribution margin per stamping machine hour. This is because the product with the highest contribution margin will generate a greater incremental money per unit of product after deducting the cost of production of each units.

Simply put, the product that has thte highest profit margin per unit after deducting the cost of production of that unit is most appropriate to be sold by Kinsi corporation.

Cheers