Lachapelle Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.The company has provided the following data for product A97B: What is the profitability index for product A97B?
A)$8.10 per minute
B)$1,270,080
C)0.30
D)$27.00 per minute

Question

Lachapelle Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions.The company has provided the following data for product A97B:  What is the profitability index for product A97B?
A)$8.10 per minute 
B)$1,270,080 
C)0.30 
D)$27.00 per minute

Quizplus · Accepted Answer

Profitability index for a volume trade-off decision = Unit contribution margin F1F1F1S1F1F1F10 Amount of the constrained resource required by one unit = ($432.00 - $302.40)F1F1F1S1F1F1F10 16 minutes = $129.60 F1F1F1S1F1F1F10 16 minutes = $8.10 per minute

Lachapelle Corporation Would Like to Determine the Relative Profitability of the Company's