Sullen Corporation would like to determine the relative profitability of a number of jobs.For example,the revenue from Job M02P is $86,800 and its avoidable costs amount to $60,760,resulting in an incremental profit of $26,040.Furthermore,the job requires 280 hours of the constrained resource.What is the profitability index for job M02P?
A)0.30
B)$310 per hour
C)$93 per hour
D)$217 per hour

Question

Quizplus · Accepted Answer

Profitability index = Incremental profit from the segment F1F1F1S1F1F1F10 Amount of the constrained resource required by the segment = $26,040 F1F1F1S1F1F1F10 280 hours = $93 per hour

Sullen Corporation Would Like to Determine the Relative Profitability of a Number