Orly Company produces two models of an industrial product that require the use of a laser-operated drilling machine. The laser-operated drilling machines owned by the firm provide a total of 12,000 hours per year. Model A-4 requires six hours of machine time, and model M-3 requires three hours per machine time. Model A-4 has a contribution margin of $24 per unit, and Model M-3 has a contribution margin of $15.

REQUIRED 1. Calculate the optimal number of units of each model that should be produced, assuming that an unlimited number of each model can be sold. (6 marks)

2. Calculate the optimal number of units of each model that should be produced, assuming that no more than 2,500 units of each model can be sold. (5 marks)

3. Based on your answer to requirement 2 above, calculate the total contribution margin. (4 marks)