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

question 51

Multiple Choice

Francke Corporation would like to determine the relative profitability of a number of jobs. For example, job H29O has revenues of $86,400 and avoidable costs of $69,120, resulting in an incremental profit of $17,280. The job requires 160 hours of the constrained resource. The job is responsible for 13% of the company's total profit for the period. What is the profitability index for job H29O?

• A)$108 per hour
• B)$540 per hour
• C)0.13
• D)0.20

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Definitions:

Federal Income Tax

The tax levied by the U.S. government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Allowances

Reductions from the gross amount due to defects or allowances for customer discounts, contributing to the net sales figure.

W-4 Form

A tax form used by employees to indicate their tax situation to their employer, such as number of dependents and marital status, affecting the amount of federal income tax withheld from their pay.

FICA-Medicare

A federal payroll tax that funds Medicare, the U.S. health insurance program for individuals aged 65 and over or who meet other specific criteria.