Answer: True
Explanation:
To maximize profit when a constrained resource exists, management should produce the sales mix which has the highest contribution margin per unit of scarce resource.
For example, if the contribution per unit of product A and product B are 15 and 20, with labor hour required for product A 1 hour and that of product B 2 hours and the contribution margin for product you for product A is $15 and for product B is $10.
Then, product A has higher contribution margin despite using less labor hour.
