Final answer:
In a multiple-product firm, the product with the highest contribution margin per unit will generate more profit for each $1 of sales than other products.
Step-by-step explanation:
In a multiple-product firm, the product that has the highest contribution margin per unit will generate more profit for each $1 of sales than the other products. This is because the contribution margin represents the portion of each unit sale that contributes to covering fixed costs and generating profit. Therefore, a higher contribution margin per unit means that a larger portion of each sale goes towards covering costs and generating profit.
For example, let's say Company A produces two products: Product X and Product Y. Product X has a contribution margin of $10 per unit, while Product Y has a contribution margin of $5 per unit. This means that for every unit sold of Product X, $10 goes towards covering costs and generating profit, whereas for every unit sold of Product Y, only $5 goes towards covering costs and generating profit. Therefore, Product X will generate more profit for each $1 of sales compared to Product Y.