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

question 112

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 contribution margin per unit of scarce resource (machine time) for Model P-4?

• A)$12
• B)$14
• C)$24
• D)$28

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Definitions:

Performance Rating

The evaluation of an individual's work output and effectiveness in their designated role, typically influencing promotions, salary adjustments, and development opportunities.

Constant Allowances

Fixed amounts or factors considered in calculations or processes, not subject to change based on conditions.

Normal Time

The standard duration that a task or activity is expected to take under normal circumstances.

Standard Time

The established duration that a given task should take to complete, often used in manufacturing and workforce management to optimize productivity.