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

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: $$\begin{array} { l r } \text { Revenue..................... } & \$ 98,600 \\\text { Avoidable cost ............. } & \underline { 69,020 } \\\text { Incremental profit....... } & \$ 29,580\end{array}$$ 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

Correct Answer:

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