Use the information below to answer the following questions.
Computer Expertise Ltd provides three services, the details for which are as follows: The demand for all services is unlimited. The ability to provide each service is limited by the availability of qualified staff and therefore the labour time available.
-Refer to the table above. Which product is the most profitable?

Question

Use the information below to answer the following questions.
Computer Expertise Ltd provides three services, the details for which are as follows:  The demand for all services is unlimited. The ability to provide each service is limited by the availability of qualified staff and therefore the labour time available.
-Refer to the table above. Which product is the most profitable?

Quizplus · Accepted Answer

Basic is the most profitable because it provides the highest dollar contribution per labour hour. Although Expert has the highest sales price, it also requires the most labour time per unit, resulting in a lower dollar contribution per labour hour compared to Basic. Secretarial is not a profitable service as it generates only $20 in contribution margin and requires the same labour time as Basic.

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