Bob's company produces 3 products with the following information     Product SmallMedium Large Selling price per unit$17$19$26variable cost per unit $8$10$12machine hours per unit (mh/unit)234     the bob company has a limit of 14,300 machine hour available per month and a monthly fixed cost of $50,000. the demand for each product is 2,500 units per month. the company's goal is to maximize its profitability. suppose the bob's company can rent a machine that will provide an additional 1,390 machine hours per month.   what is the maximum monthly rent the bob's company should be willing to pay for this machine (assuming they have made optimal use of their own machine)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Bob's company produces 3 products with the following information

 

  Product SmallMedium Large Selling price per unit$17$19$26variable cost per unit $8$10$12machine hours per unit (mh/unit)234    

the bob company has a limit of 14,300 machine hour available per month and a monthly fixed cost of $50,000. the demand for each product is 2,500 units per month. the company's goal is to maximize its profitability. suppose the bob's company can rent a machine that will provide an additional 1,390 machine hours per month.

 

what is the maximum monthly rent the bob's company should be willing to pay for this machine (assuming they have made optimal use of their own machine)

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