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vodomira [7]
3 years ago
12

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. What is the contribution margin per unit of scarce resource (machine time) for Model K-3?
Business
1 answer:
tresset_1 [31]3 years ago
7 0

Answer:

Contribution per unit of scare resource (in hour) = $24 per hour

Explanation:

The question falls under the limiting factor analysis

<em>When a business is faced with a problem of shortage of a resource which can be used to produced more than one product type, to maximize the use of the resource , the business should allocate it for production purpose in such a way that </em><em>it maximizes the contribution per unit of the scare resource.</em>

Therefore Santario Company should allocate the machine hours to maximize the contribution per unit of machine hour.

Contribution per unit of scare resource is determine as follows:

Contribution per unit of scare resource for Model K-3

Contribution per unit of Model K-3 = $6

Machine time per unit =  15 minutes

<em>Contribution per unit of scare resource in minutes</em>

=Contribution per unit/Machine time per unit

= 46/15 minutes

= $0.4 per minute

Contribution per unit of scare resource (in hour)

$0.4 per minutes× 60

= $24 per hour

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Answer:

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is this fReEeE?

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2 years ago
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PtichkaEL [24]

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2 years ago
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4 0
3 years ago
Read 2 more answers
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denis23 [38]

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(Its a false statement about cost structure and financial risk)

Explanation:

All of the given statements about cost structure and financial risk are true except the statement B. Provider can capitulate and reduce the expected risk by increasing the proportion of the fixed cost. Moreover, it can also reduce risk totally free of cost with the help of increasing the variable cost. The risk under capitation can be also reduced by increasing the number of capitulated members. Furthermore, the risk can also be reduced by increasing provider actuarial and cost measurement expertise. The only thing which is false here is that the provider's cost structure has no impact on the reimbursement risk at all in any way, that's why it should be the chosen answer.

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3 years ago
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Answer:

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3 years ago
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