Heilmann Corporation would like to determine the relative profitability of a number of jobs.For example,job S96T has revenues of $68,000 and avoidable costs of $54,400,resulting in an incremental profit of $13,600.The job requires 170 hours of the constrained resource.The job is responsible for 10% of the company's total profit for the period.What is the profitability index for job S96T?
A)0.20
B)$400 per hour
C)$80 per hour
D)0.10

Question

Quizplus · Accepted Answer

Profitability index = Incremental profit from the segment F1F1F1S1F1F1F10 Amount of the constrained resource required by the segment = $13,600 F1F1F1S1F1F1F10 170 hours = $80 per hour

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