Here are data regarding the three products that Acme Company makes and sells: Product P Product Q Product Annual customer demand, in units 1,200 units 1,500 units 1,000 un Selling price, per unit $80 $83 $- Variable operating costs, per unit $35 $26 $ Machine time to produce one unit 2.5 hours 3.0 hours 1.25 hou Acme's current capacity is 4,250 machine hours per year. What is the maximum amount Acme should be willing to pay per machine hour to acquire an additional 100 hours of capacity?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Here are data regarding the three products that Acme Company makes and sells:
Product P
Product Q
Product R
Annual customer demand, in units
Selling price, per unit
1,200 units
1,500 units
1,000 units
$80
$83
$45
Variable operating costs, per unit
Machine time to produce one unit
$35
$26
$20
2.5 hours
3.0 hours
1.25 hours
Acme's current capacity is 4,250 machine hours per year. What is the maximum amount that
Acme should be willing to pay per machine hour to acquire an additional 100 hours of
capacity?
○ $18
$20
○ $23
○ $19
Transcribed Image Text:Here are data regarding the three products that Acme Company makes and sells: Product P Product Q Product R Annual customer demand, in units Selling price, per unit 1,200 units 1,500 units 1,000 units $80 $83 $45 Variable operating costs, per unit Machine time to produce one unit $35 $26 $20 2.5 hours 3.0 hours 1.25 hours Acme's current capacity is 4,250 machine hours per year. What is the maximum amount that Acme should be willing to pay per machine hour to acquire an additional 100 hours of capacity? ○ $18 $20 ○ $23 ○ $19
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