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Coviello Corporation would like to determine the relative profitability of the company's products for purposes of...

Coviello Corporation would like to determine the relative profitability of the company's products for purposes of making volume trade-off decisions. For example, the selling price of product C98I is $375, its unit variable cost is $261.00, and its unit contribution margin is $114.00. One unit of the product requires 15 minutes of the constrained resource. Monthly sales are 4,470 units. What is the profitability index for product C98I?

0.30

$25.00 per minute

$509,580

$7.60 per minute

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Answer #1
profitability index = contribution margin per unit/constrained resource
114/15
7.6 per minute
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