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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.
What are the basic characteristics of a relevant cost? Why are future costs not always relevant? Are all relevant costs found in accounting records?
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