Question
The Center Company produces three products with the following costs and selling prices: Product Name Round Square Triangle Selling Price/Unit $24 $26 $20 Variable Cost/unit
The Center Company produces three products with the following costs and selling prices:
Product Name Round Square Triangle
Selling Price/Unit $24 $26 $20
Variable Cost/unit $10 $10 $12
Machine Hours/unit 2 4 4
Center has a limit of 14,600 machine hours available per month. The company has a monthly fixed cost of $30,000. The demand for each of the products is 2,500 units per month. The company's goal is to mazimize the profitability.
Suppose the company can rent a machine that will provide an additional 800 machine hours per month. What is the maximum monthly rent the company would be willing to pay for this machine?
a. $2,000
b. $4,200
c. $2,400
d. $1,200
e. $2,800
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