A company produces the following three products in a single manufacturing plant.

ProductOneTwoThreeSelling price per unit$99.00$78.60$128.90Direct materials$43.10$43.80$77.50Direct labor$31.10$14.00$21.10Variable manufacturing overhead$6.00$4.60$9.90Variable selling cost per unit$9.70$3.30$6.10Mixing minutes per unit17.202.502.50Monthly demand in units3,0001,0002,000

The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Required:

a. How many minutes of mixing machine time would be required to satisfy demand for all three products?

b. How much of each product should be produced to maximize net operating income?

c. If the company has made the best use of the existing mixing machine capacity, what is the maximum amount they should be willing to pay for one additional hour of mixing machine time?