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

question 32

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: $$\begin{array} { l r } \text { Revenue..................... } & \$ 98,600 \\\text { Avoidable cost ............. } & \underline { 69,020 } \\\text { Incremental profit....... } & \$ 29,580\end{array}$$ 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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