SOGOIT998 Company produces three products with the following information: Selling price per unit Variable cost per...

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SOGOIT998 Company produces three products with the following information: Selling price per unit Variable cost per unit Machine-hours per unit (MH/unit) Small $17 $8 2 Product Medium $19 $10 3 Large $26 $12 4 (ID#20517) The SOGOIT998 company has a limit of 14,300 machine-hours available per month and a monthly fixed cost of $14,000. The demand for each of the products is 2,500 units per month. The company's goal is to maximize its profitability. Suppose the SOGOIT998 company can rent a machine that will provide an additional 1,390 machine-hours per month. (Baruch College Exam - No assistance allowed.) Q: What is the maximum monthly rent the SOGOIT998 company should be willing to pay for this machine (assuming they've made optimal use of their own machine)? SOGOIT998 Company produces three products with the following information: Selling price per unit Variable cost per unit Machine-hours per unit (MH/unit) Small $17 $8 2 Product Medium $19 $10 3 Large $26 $12 4 (ID#20517) The SOGOIT998 company has a limit of 14,300 machine-hours available per month and a monthly fixed cost of $14,000. The demand for each of the products is 2,500 units per month. The company's goal is to maximize its profitability. Suppose the SOGOIT998 company can rent a machine that will provide an additional 1,390 machine-hours per month. (Baruch College Exam - No assistance allowed.) Q: What is the maximum monthly rent the SOGOIT998 company should be willing to pay for this machine (assuming they've made optimal use of their own machine)?

Answer rating: 100% (QA)

First lets calculate the contribution margin per unit for each product Small Selling price Variable ... View the full answer