Managerial Accounting, v1.0: "Chapter 6, Section 5: Using a Contribution Margin When Faced with Resource Constraints"

In this section, you will examine the case of Kayaks-For-Fun, which has limited amounts of labor. How do they manage those constrained units of labor to maximize profits? Many organizations operate with limited resources in areas such as labor hours, machine hours, facilities, or materials. The contribution margin per unit of constraint is a helpful measure in determining how constrained resources should be allocated.