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

question 43

Multiple Choice

Mccraig Corporation would like to determine the relative profitability of a number of jobs. For example, job S35A has revenues of $52,000 and avoidable costs of $36,400, resulting in an incremental profit of $15,600. The job requires 260 hours of the constrained resource. The job is responsible for 8% of the company's total profit for the period. What is the profitability index for job S35A?

• A) $60 per hour
• B) $200 per hour
• C) 0.30
• D) 0.08

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Definitions:

Activity Measure

An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.

Patient-visits

A measure used in healthcare to quantify the number of visits or interactions patients have with healthcare providers.

Customers Served

The number or segment of clients who receive services or purchase products from a business within a given time frame.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.