Eon Corporation has provided the following data concerning its two products: $\begin{array}{c}
\begin{array}{llcc}
\
\text { Selling price..................} & \
\text {Unit variable cost................ } &\
\text { Unit contribution margin............... } &\
\
\text { Amount of the constrained resource required for one } &\
\text { unit of the product (grams).......................... } &\
\text { Monthly unit demand.................... } &\
\end{array}
\begin{array}{lc}
Z 94 \mathrm{~K} & \mathrm{R} 82 \mathrm{C} \
\$ 63.00 & \$ 261.00 \
\underline{50.40} & \underline{208.80} \
\underline{ \$ 12.60 }&\underline{ \$ 52.20}\
\
\
3 & 9 \
2,100 & 4,300
\end{array}
\end{array}$
The profitability index for product Z94K is closest to:

Question

Eon Corporation has provided the following data concerning its two products: $\begin{array}{c}
\begin{array}{llcc}
\
  \text {  Selling price..................} &  \
 \text {Unit variable cost................ } &\
 \text { Unit contribution margin............... } &\
\
 \text { Amount of the constrained resource required for one  } &\
 \text { unit of the product (grams).......................... } &\
 \text { Monthly unit demand.................... } &\
\end{array}
\begin{array}{lc}
Z 94 \mathrm{~K} & \mathrm{R} 82 \mathrm{C} \
\$ 63.00 & \$ 261.00 \
\underline{50.40} & \underline{208.80} \
\underline{ \$ 12.60 }&\underline{ \$ 52.20}\
\
\
3 & 9 \
2,100 & 4,300
\end{array}
\end{array}$
 The profitability index for product Z94K is closest to:

Quizplus · Accepted Answer

The profitability index is calculated as the unit contribution margin divided by the amount of the constrained resource required. For product Z94K, it is $12.60 / 3 grams = $4.20 per gram.

Eon Corporation Has Provided the Following Data Concerning Its Two