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

Multiple Choice

Francke Corporation would like to determine the relative profitability of a number of jobs. For example, job H29O has revenues of $86,400 and avoidable costs of $69,120, resulting in an incremental profit of $17,280. The job requires 160 hours of the constrained resource. The job is responsible for 13% of the company's total profit for the period. What is the profitability index for job H29O?

A) $108 per hour
B) $540 per hour
C) 0.13
D) 0.20