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Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit...

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Accounting

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. Refer to Figure 13-5. What is the contribution margin per unit of scarce resource (machine time) for Model P-4?

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