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Assume that a company makes three productsProduct A, Product B, and Product Cand provides the following information with respect to those products: Product A Product

Assume that a company makes three productsProduct A, Product B, and Product Cand provides the following information with respect to those products:

Product A Product B Product C
Selling price $ 80 $ 75 $ 85
Variable costs per unit:
Direct materials 16 24 20
Direct labor 40 28 32
Variable overhead 2 2 3
Total variable cost per unit 58 54 55
Contribution margin per unit $ 22 $ 21 $ 30
Machine-hours per unit 2.5 3.0 4.0

The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. The company has only 1,000 machine-hours available for production. Assuming the company has made optimal use of its 1,000 machine-hours, what is the maximum amount per hour the company should be willing to pay to rent additional machine-hours of capacity?

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