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: 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

Question

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:  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

Quizplus · Accepted Answer

Profitability index = Incremental profit from the segment ÷ Amount of the constrained resource required by the segment = $29, 580 ÷ 340 hours = $87 per hour

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