Whelchel Products Inc

Multiple Choice

Whelchel Products Inc.makes two products-K12C and R25O.Product K12C's selling price is $56.00 and its unit variable cost is $33.60.Product R25O's selling price is $195.00 and its unit variable cost is $156.00.The monthly demand is 980 units for product K12C and 500 units for R25O.The constrained resource is a particular machine that is available for 10, 100 minutes each month.Each unit of product K12C requires 7 minutes on this machine and each unit of product R25O requires 15 minutes on this machine. The company is considering launching a new product that would have a variable cost of $134.00 per unit and no avoidable fixed costs.It would require 16 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

A) $175.60
B) $185.20
C) $136.60
D) $134.00