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Wasp company produces three products with the following information: Product A B C Selling price per unit $17 $19 $26 Variable cost per unit $8

Wasp company produces three products with the following information:

Product
A B C
Selling price per unit $17 $19 $26
Variable cost per unit $8 $10 $12
Machine-hours per unit (MH/unit) 2 3 4

The company has a limit of 13,800 machine-hours available per month and a monthly fixed cost of $8,500. The demand for each of the products is 2,500 units per month.

The companys goal is to maximize its profitability.

Suppose the company can rent a machine that will provide an additional 1,530 machine-hours per month.

Q.: What is the maximum monthly rent the company should be willing to pay for this machine (assuming theyve made optimal use of their own machine)?

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