Clarke Corporation manufactures three products (X-1, X-2, and X-3) utilizing, in one of the processes, a single machine for all products. Data on the individual products follow X-1 X-2 X-3 S S S Price per unit Variable cost per unit Machine hours per unit Maximum units demand per period 100 200 400 S 50 120 240 1.0 2.5 4.0 150,000 300,000 20,000 The single machine used for all three products has a maximum capacity of 500,000 hours per period. a. A local engineering firm claims it can revise the production process such that product X-2 only requires 1.6 machine hours on the shared machine. How much would Clarke be willing to pay per period for the new process?

b. Suppose, instead, that the local engineering firm can revise the production process such that Product X-3 only requires 3.5 machine hours on the shared machine. (Product X-2 requires 2.5 machine hours as in Problem 4-75.) How much would Clarke be willing to pay per period for the new process?