Financial Analysis in 6 hours

Roberta’s Robots Ltd. manufactures three different models –basic, enhanced, and deluxe. Considerable market demand exists for all models. The following per unit data apply:

                                                                                                        Basic                  Enhanced              Deluxe

    Selling price                                                                             $400                       $500                       $600

    Direct materials                                                                       100                         150                         200

    Direct labor ($20 per hour)                                                    40                           50                           60

    Variable support costs ($4 per machine hour)              80                           60                         100

    Fixed support costs                                                                  60                           60                           60

      Gross profit                                                                           $120                       $180                       $180

Required: If there is no excess machine capacity, which model(s) should the company produce to maximize profits?