Garbarino 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 C54V: What is the profitability index for job C54V?
A)$290 per hour
B)$58 per hour
C)0.30
D)0.20

Question

Garbarino 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 C54V:   What is the profitability index for job C54V?
A)$290 per hour 
B)$58 per hour 
C)0.30 
D)0.20

Quizplus · Accepted Answer

Profitability index = Incremental profit from the segment ÷ Amount of the constrained resource required by the segment = $14, 500 ÷ 250 hours = $58 per hour

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