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9 Springfield Company makes two products in a single facility. These products have the following unit product costs: Products XYZ STW Selling price per unit

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9 Springfield Company makes two products in a single facility. These products have the following unit product costs: Products XYZ STW Selling price per unit $70.00 $63.00 Monthly demand in units 2,000 4,000 Variable Cost of Production per unit: Direct material $11.00 $12.00 Direct labor $16.00 $14.00 Variable manufacturing overhead $5.00 Variable product cost per unit $5.00 $32.00 $31.00 Additional data concerning these products are listed below. Products Mixing minutes required per unit STW The mixing machines are potentially the constraint in the production facility. Since Springfield expects to have only 13,000 minutes next month, they decided to inquire about the possibility of renting a mixing machine from another company that would provide additional 5,000 minutes. Up to how much should the company be willing to pay for the machine? Assume that the company has made the best use of the existing mixing machine capacity A. $38,800 B. $38,000 C. $39,200 D. $40,000 E. None of the above

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