1. 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? Why
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