US CMA Part 2 · Chapter 6 · Question 9 of 22
Felton Machining has a shortage of machine hours. Data per unit: Product P: contribution margin $30, 2 machine hours Product Q: contribution margin $36, 3 machine hours Product R: contribution margin $20, 1 machine hour Demand exceeds capacity for all three. In what order should production be prioritized to maximize total contribution?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) R, then P, then Q
Explanation
When one resource is binding, rank products by contribution margin per unit of the scarce resource. P: $30 / 2 = $15 per hour. Q: $36 / 3 = $12 per hour. R: $20 / 1 = $20 per hour. Priority is R ($20), then P ($15), then Q ($12). Ranking by contribution per unit (Q first) ignores the constraint.
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