Munoz Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here.

Cost of materials (14,600 Units $21)	$	306,600
Labor (14,600 Units $16)		233,600
Depreciation on manufacturing equipment*		23,000
Salary of supervisor of engine production		72,000
Rental cost of equipment used to make engines		29,000
Allocated portion of corporate-level facility-sustaining costs		85,000
Total cost to make 14,600 engines	$	749,200

^*The equipment has a book value of $100,000 but its market value is zero. Required

1. Determine the maximum price per unit that Munoz would be willing to pay for the engines.

2. Determine the maximum price per unit that Munoz would be willing to pay for the engines, if production increased to 18,100 units.