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

question 65

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 P-4 in terms of a percentage of a machine hour?

• A)0.10
• B)0.25
• C)0.30
• D)0.50

Learn the significance of long-term purchase commitments through blanket orders.

Differentiate between the major variations of online catalogues.

Grasp different facets of supply chain management, including environmental risks and integration strategies.

Recognize ethical considerations and standards within supply chain management.

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Definitions:

Demand Requirements

The specific quantities of products or services that a market or customer base needs over a particular period.

Pure Level Strategy

A production strategy where the output levels are kept constant despite fluctuating demand, aiming at minimizing changes in production rates.

Supply

The total amount of goods or services available for purchase in a market, or the provision of necessary resources.