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 amount of machine time for model P-4 in terms of percent of a machine hour?
A) 10%
B) 20%
C) 25%
D) 30%
E) 50%

Question

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 amount of machine time for model P-4 in terms of percent of a machine hour?
A) 10%
B) 20%
C) 25%
D) 30%
E) 50%

Quizplus · Accepted Answer

Model P-4 requires 30 / 60 or 50% of a machine hour.

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