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

question 3

Multiple Choice

Wang Corporation would like to determine the relative profitability of a number of jobs. For example, the revenue from Job Q86D is $105,300 and its avoidable costs amount to $63,180, resulting in an incremental profit of $42,120. Furthermore, the job requires 270 hours of the constrained resource. What is the profitability index for job Q86D?

• A) 0.40
• B) $234 per hour
• C) $156 per hour
• D) $390 per hour

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Definitions:

Good-faith Purchaser

Someone who buys property without knowledge of any existing claims or defects against it, thus acquiring free and clear ownership.

Voidable

Describes a contract or transaction that may appear to be valid but can be legally declared void by one of the parties to the contract for reasons such as fraud or coercion.

Good Title

refers to a legal term meaning ownership of property is legally valid, with no encumbrances or disputes that could question rightful ownership.

CIF

"Cost, Insurance, and Freight," a term used in international shipping agreements where the seller is responsible for the transportation costs, insurance, and freight charges to the designated port.