Eon Corporation has provided the following data concerning its two products: The profitability index for product Z94K is closest to:
A)$4.20 per gram
B)0.19
C)0.11
D)0.20

Question

Eon Corporation has provided the following data concerning its two products:  The profitability index for product Z94K is closest to:
A)$4.20 per gram 
B)0.19 
C)0.11 
D)0.20

Quizplus · Accepted Answer

Profitability index for a volume trade-off decision = Unit contribution margin ÷ Amount of the constrained resource required by one unit = $12.60 ÷ 3 grams = $4.20 per gram

Eon Corporation Has Provided the Following Data Concerning Its Two