Alpha Company Produces Two Models of a Component: Model K-3

question 113

Multiple Choice

Alpha Company produces two models of a component: Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6, and 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 the Figure.What is the amount of machine time for model K-3 in terms of percentage of a machine hour?

• A)0.10
• B)0.20
• C)0.25
• D)0.40