Kristen Company manufactures three products: X, Y, and Z. The demand for each product is 100 units. The selling price, variable expenses, and contribution margin for one unit of each product follow: Product X Y Z Selling price $140 $300 $390 Less variable expenses (Only Special steel) 50 100 150 Contribution margin $90 $200 $240 Steel need to make 1 unit 1 kg 2 kg 3 kg The same special steel is used for all three products. 1 kg of the steel costs $50. Assume that the company has made all units required for X and Y. Now Kristen does not have enough steel remaining to make all 100 units demanded for Z. An outside vendor can furnish Kristen with additional steel at some price. How much is the highest price that Kristen is willing to pay per kg of additional steel? A. $100 B. $50 C. $80 D. $130 E. $150
QUESTION 42
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Kristen Company manufactures three products: X, Y, and Z. The demand for each product is 100 units. The selling price, variable expenses, and contribution margin for one unit of each product follow:
Product
X
Y
Z
Selling price
$140
$300
$390
Less variable expenses
(Only Special steel)
50
100
150
Contribution margin
$90
$200
$240
Steel need to make 1 unit
1 kg
2 kg
3 kg
The same special steel is used for all three products. 1 kg of the steel costs $50.Assume that the company has made all units required for X and Y. Now Kristen does not have enough steel remaining to make all 100 units demanded for Z. An outside vendor can furnish Kristen with additional steel at some price. How much is the highest price that Kristen is willing to pay per kg of additional steel?
A. $100
B. $50
C. $80
D. $130
E. $150
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