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

question 20

Multiple Choice

Reetz Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For illustration, the company has provided the following data for product A25H: $\begin{array}{lr}\text {Selling price }&\$ 58.00 \\\text {Variable cost per unit }&\$ 46.40 \\\text { Amount of the constrained resource required by one unit.}&\text {2 grams }\\\text {Monthly unit sales }&\text {4,100 units }\\\end{array}$
What is the profitability index for product A25H?

• A)$47,560
• B)$29.00 per gram
• C)$5.80 per gram
• D)0.20

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Definitions:

Harvest Seasons

The time periods during the year when crops are ripe and harvested, varying by geographical location and type of crop.

Game The System

Utilizing the rules and guidelines of a system in a way that manipulates or exploits loopholes for personal benefit.

Agency Costs

Costs that arise from conflicts of interest between principals (owners) and agents (managers), including monitoring and incentive expenses.

Background Checks

The process of verifying the personal, financial, and criminal history of an individual, commonly undertaken by employers.