Alphaomega company manufactures three types of DVD storage units. Each of the three types requires the use of a special machine that has a total operating capacity of 15,000 hours per year. Information on the three types of storage units is as follows:

Basic Standard Deluxe Selling price $15.00 $30.00 $35.00 Variable cost $10.00 $20.00 $10.00 Machine hours required 0.20 0.60 0.75 Alphaomega's marketing director has assessed demand for the three types of storage units and believes that the firm can sell as many units as it can produce.

1. If you were the management of the company, how many storage units (s) should be produced and sold to maximise the company's profit margin? 2. Now suppose that Alphaomega Company believes that it can sell no more than 12,000 of the deluxe model but up to 50,000 each of the basic and standard models at the selling prices estimate. What product mix would you recommend, and what would be the contribution margin? 3. What qualitative factors you should consider before making the decision to sell the product as your calculation in (2)? Give two factors and justify your answer.

You must explain in your own word.