Santorino Company Produces Two Models of a Component, Model K-3

question 118

Multiple Choice

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.
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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:

Subliminal Messages

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Hypothalamus

A region of the brain that plays a crucial role in many essential functions, including hormone regulation, temperature control, and hunger.

Hypnosis

A mental state akin to trance, marked by elevated suggestibility and concentrated attention, often adopted for therapeutic interventions.

Sexual Motivation

The desire to engage in sexual activity, influenced by biological, psychological, and social factors.