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

question 61

Multiple Choice

Dorich Corporation would like to determine the relative profitability of a number of jobs.For illustration purposes,the company has provided the following data for job P86M: $$\begin{array} { l r } \text { Revenue................. } & \$ 98,600 \\\text { Avoidable cost ......... } & \underline { 69,020 } \\\text { Incremental profit...... } & \underline { \$ 29,580}\end{array}$$ The amount of the constrained resource used by the job is 340 hours. What is the profitability index for job P86M?

• A)$87 per hour
• B)$290 per hour
• C)$203 per hour
• D)0.30

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Definitions:

Type II Error

The error that occurs when a false null hypothesis is not rejected; failing to detect an effect that is present.

Type II Error

A statistical error that occurs when a test fails to reject a false null hypothesis, also known as a false negative.

Effect Size

A quantitative measure of the strength of a phenomenon or the magnitude of a difference between groups in a statistical analysis.

Significance Level

A threshold used in hypothesis testing that determines the probability of rejecting a null hypothesis when it is actually true.