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Product pricing and profit analysis with bottleneck operations P12-6 Chavez Chemical Company produces three products; ethylene, butane, and ester. Each products has high demand in the market, and Chavez Chemical is able to can produce of all three. The reaction operation is a bottleneck in the process and uch a to sell as much as a at 100% of capacity. Chavez Chemical wants to improve chemical operation variable conversion cost is $20 per process hour. The fixed cost is $550,00, cost analyst was able to determine the following information about the three rofitability. The addition, the gin Ethylene ButaneEster 15,000 15,000 15,000 Budgeted units produced Total process hours per unit Reactor hours per unit Unit selling price Direct materials cost per unit 0.5 5250 90 $400 $180 $350 $130 The reaction operation is part of the total process for each of these three products. Thus, fir example, 1.0 of the 6 hours required to process ethylene is associated with the reactor Instructions 1. Determine the unit contribution margin for each of the three products 2. Provide an analysis to determine the relative product profitabilities, assuming that the reac tor is a bottleneck. 3. Assume that management wishes to improve profitability by increasing prices on se lected roducts. At what price would ethylene and butane need to be offered in order to prodiuct the same relative profitability as ester