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Single Limiting Factor
Where a single limiting factor exists for the decision making sequence may be implemented given as:-
- Compute the contribution per unit of limiting factor for every product
- Rank the products in order of size and contribution per unit of limiting factor
- Permit any minimum retention of less profitable products that is decided upon
- Use up the net units of the limiting factor in order to fulfill the forecast quantities in order of product ranking.
The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3) m
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Do I use the contribution per unit and the total sales for the department in order to calculate the p/v ratio for a department
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Sales: $168,042 Variable Costs: $63,987 Total fixed expenses:$ 75,794 Number units sold per year: 6367 1. What is the contribution margin per unit of your product or service? 2.
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