Whitacre Products Inc

Multiple Choice

Whitacre Products Inc. makes two products—P32W and I90J. Product P32W's selling price is $44.00 and its unit variable cost is $26.40. Product I90J's selling price is $220.00 and its unit variable cost is $198.00. The monthly demand is 3,500 units for product P32W and 760 units for I90J. The constrained resource is a particular machine that is available for 9,800 minutes each month. Each unit of product P32W requires 2 minutes on this machine and each unit of product I90J requires 10 minutes on this machine.
-Up to how much should the company be willing to pay to obtain enough of the constrained resource to satisfy demand for the two existing products?

A) $22.00 per minute
B) $2.20 per minute
C) $17.60 per minute
D) $8.80 per minute