Needle Is a Private Laboratory That Performs More Than 100

question 43

Multiple Choice

Needle is a private laboratory that performs more than 100 different tests and analyses. Four tests require the use of a radiological counting machine that can supply 6,000 hours per year. Information on the four lab tests are as follows:
$\begin{array}{lrrrr} & \text { Test A } & \text { Test B } & \text { Test C } & \text { Test D } \\\text { Charging rate } & \$ 50 & \$ 20 & \$ 80 & \$ 70 \\\text { Variable cost } & 10 & 10 & 60 & 30 \\\text { Machine hours } & 2 & 1 & 0.5 & 0.25\end{array}$
-Refer to the Figure.What is the contribution margin per unit of machine time for Test D?

• A)$20
• B)$40
• C)$100
• D)$160

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Definitions:

Rent Seeking

The practice of gaining economic benefits through manipulation or exploitation of the political environment, often by influencing regulations or policies to obtain monopolies or other competitive advantages.

Private Sector

The part of the economy that is owned and operated by individuals and companies for profit, rather than by the government.

Wealth Creation

The process of generating a net increase in economic resources from various activities, such as investment or entrepreneurship.

Operational Efficiency

The capability of an organization to deliver products or services to its customers in the most cost-effective manner without sacrificing quality.