Use the following information for the next 3 questions.
Ricardo Company has three products, A, B, and C. The following information is available:
-What is the maximum amount that Clark would be willing to pay, above the normal cost, for one more machine hour per week?
A) $10.00
B) $13.33
C) $35.00
D) $0.00

Question

Use the following information for the next 3 questions.
Ricardo Company has three products, A, B, and C. The following information is available: 
-What is the maximum amount that Clark would be willing to pay, above the normal cost, for one more machine hour per week?
A) $10.00 
B) $13.33 
C) $35.00 
D) $0.00

Quizplus · Accepted Answer

The maximum amount that Clark would be willing to pay, above the normal cost, for one more machine hour per week is $13.33. This is because the additional machine hour would allow Clark to produce 100 more units per week, which would generate an additional $1,333 in revenue. The normal cost of producing 100 units is $1,200, so Clark would be willing to pay up to $133 more than the normal cost for the additional machine hour.

Use the Following Information for the Next 3 Questions