Concept Introduction:
Variable Cost: Variable cost is a cost that changes, when volume of production changes in the same direction and in the same proportion.
Fixed Cost: Fixed cost is a cost that remains constant, irrespective of changes in production volume.
Contribution Margin: Contribution margin is per unit gross operating margin of a product and calculated by selling price per unit minus variable cost per unit.
Constraining factor: Constraining factor is a factor that restricts or limits the production or sale of any product or service. It is also called limiting factor.
1.
To Identify: The constraining factor for Brik.
2.
To Fine: The company should emphasize the product line.
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Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)
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