Rooney 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 (14,200 Units $25) $ 355,000 Labor (14,200 Units $16) 227,200 Depreciation on manufacturing equipment* 27,000 Salary of supervisor of engine production 75,000 Rental cost of equipment used to make engines 16,000 Allocated portion of corporate-level facility-sustaining costs 86,000 Total cost to make 14,200 engines $ 786,200

*The equipment has a book value of $94,000 but its market value is zero.

A. Determine the maximum price per unit that Rooney would be willing to pay for the engines.

B. Determine the maximum price per unit that Rooney would be willing to pay for the engines, if production increased to 18,850 units.