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Banfield Corporation makes three products that use compound W, the current constrained resource. Data concerning those products appear below: Selling Price Per Unit, VP(248.04) YI (230.66) WX (505.44) Variable Cost Per Unit, VP (190.71) YI (172.14) WX (388.80) Centiliters pf Compound W, VP(3.90) YI (3.80) WX (8.10)

Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Points : 2) WX, VP, YI YI, VP, WX WX, YI, VP VP, WX, YI

Respuesta :

letmeanswer

Solution and Explanation:

The following is used to calcuate and analyze the ranks in the order of profitability on the basis of current data

Banfield Corporation    

the Product details              VP                      YI         WX

Unit Selling price              248.04              230.66            505.44

Unit Variable cost              190.71                       172.14            388.80

Unit Contribution

Margin                                57.33                 58.52            116.64

Centilitres of

Compound W per unit             3.90                   3.80                 8.10

Contribution Margin

per Centilitre of W=                14.70                 15.40              14.40

Ranking Most profitable

to least profitable                               II                         I            II  

Thus, as per the above calculation, the Rank is YI, VP, WX    

 

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