Rundle 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 (14,800 Units $14)	$	207,200
Labor (14,800 Units $26)		384,800
Depreciation on manufacturing equipment*		25,000
Salary of supervisor of engine production		81,000
Rental cost of equipment used to make engines		25,000
Allocated portion of corporate-level facility-sustaining costs		73,000
Total cost to make 14,800 engines	$	796,000

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

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

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