Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest.

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28-07-2022
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Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest.

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Tutorconsortium325 Tutorconsortium325 · Answer 1 · 2022-08-04T22:35:43+02:00

Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest contribution margin per unit of the constraint.

What are Fixed costs?

A cost that remains constant regardless of how many units of products or services are produced or sold is referred to as a fixed cost.
Fixed costs are outlaid that a business must cover regardless of the particular commercial activities it engages in.
As a result, fixed expenses are typically indirect because they don't relate to the creation of any goods or services by a corporation.

What are some examples of fixed costs?

The majority of fixed costs are expenses that depend more on time than they do on how much your company produces or sells.

Rent and leasing charges, salary, energy prices, insurance, and loan repayments are a few examples of fixed costs.
There are some taxes that are fixed costs as well, such as company licenses.

Learn more about fixed costs here:

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