Mcbee Products Inc

Multiple Choice

Mcbee Products Inc. makes two products-C38S and V81Z. Product C38S's selling price is $91.00 and its unit variable cost is $72.80. Product V81Z's selling price is $200.00 and its unit variable cost is $180.00. The monthly demand is 890 units for product C38S and 680 units for V81Z. The constrained resource is a particular machine that is available for 10,000 minutes each month. Each unit of product C38S requires 7 minutes on this machine and each unit of product V81Z requires 10 minutes on this machine.
-The company is considering launching a new product that would have a variable cost of $191.00 per unit and no avoidable fixed costs. It would require 4 minutes of the constrained resource. The absolute minimum acceptable selling price for the new product should be:

A) $191.00
B) $199.00
C) $193.00
D) $201.40