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

question 64

Multiple Choice

Dombrowski Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For example, the selling price of product V48Q is $150.00, its unit variable cost is $135.00, and its unit contribution margin is $15.00. One unit of the product requires 6 minutes of the constrained resource. Monthly sales are 5,800 units. What is the profitability index for product V48Q?

• A) $2.50 per minute
• B) 0.10
• C) $25.00 per minute
• D) $87,000

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