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Holton Company makes three products in a single facility. Data concerning these products follow: ...

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Accounting

Holton Company makes three products in a single facility. Data concerning these products follow:
Product
A B C
Selling price per unit $ 151.80 $ 75.40 $ 179.00
Direct materials $ 66.00 $ 42.00 $ 107.60
Direct labor $ 47.50 $ 13.40 $ 31.40
Variable manufacturing overhead $ 9.10 $ 4.40 $ 14.60
Variable selling cost per unit $ 23.90 $ 3.20 $ 9.00
Mixing minutes per unit 42.402.002.00
Monthly demand in units 3,0001,0002,000
The mixing machines are potentially the constraint in the production facility. A total of 14,000 minutes are available per month on these machines.
Direct labor is a variable cost in this company.
Required: Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? Please explain the step by step process

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