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Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct

Bruce Corporation makes four products in a single facility. These products have the following unit product costs:

 Products
 ABCD
Direct materials$14.50$10.40$11.20$10.80
Direct labor 19.60 27.60 33.80 40.60
Variable manufacturing overhead$4.50$2.90$2.80$3.40
Fixed manufacturing overhead 26.70 35 26.80 37.40
Unit product cost 65.30 79.90 74.60 92.20
 

Additional data concerning these products are listed below.

 Products
 ABCD
Grinding minutes per unit 4.00 5.50 4.50 3.60
Selling price per unit$76.30$93.70$87.60$104.40
Variable selling cost per unit$2.40$1.40$3.50$1.80
Monthly demand in units 4,200 4200 3200 2,200
 

The grinding machines are potentially the constraint in the production facility. A total of 61,900 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Up to how much should the company be willing to pay for one additional minute of grinding machine time if the company has made the best use of the existing grinding machine capacity? 

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