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)
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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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