Figure 13-5

question 23

Multiple Choice

Figure 13-5. Santorino Company produces two models of a component,Model K-3 and Model P-4.The unit contribution margin for Model K-3 is $6; the unit contribution margin for Model P-4 is $14.Each model must spend time on a special machine.The firm owns two machines that together provide 4,000 hours of machine time per year.Model K-3 requires 15 minutes of machine time; Model P-4 requires 30 minutes of machine time.
Refer to Figure 13-5.What is the contribution margin per unit of scarce resource (machine time) for Model P-4?

• A)$6
• B)$12
• C)$24
• D)$14
• E)$28

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Definitions:

Konrad Adenauer

The first Chancellor of the Federal Republic of Germany (West Germany) from 1949 to 1963, noted for his role in the country's post-war reconstruction and development.

Chancellor

A senior official who heads a government department or a university, varying significantly in specific duties and authority across countries and institutions.

Eastern Bloc

The Eastern Bloc refers to the group of communist states of Central and Eastern Europe, including the Soviet Union, during the Cold War.

Economy

The system of production, distribution, and consumption of goods and services within a particular geographic area or country.