Proposal P 8. Hercules Steel Company produces three grades of steel: high, good, and regular grade. Each of these products (grades) has high demand in the market, and Hercules is able to sell as much as it can produce of all three. The furnace operation is a bottleneck in the process and is running at 100% of capacity. Hercules wants to improve steel operation profitability. The variable conversion cost is $12 per process hour. The fixed cost is $480,000. In addition, the cost analyst was able to determine the following information about the three products: High Grade Good Grade Regular Grade Budgeted units produced 4,000 4,000 4,000 Total process hours per unit 17 15 12 Furnace hours per unit 3 45 OS Unit selling price $329 $301 $292 talan Direct materials cost per unit $110 $105 $98 The furnace operation is part of the total process for each of these three products. yor a. Calculate the unit contribution margin for each product. High Grade Good Grade w brn Regular Grade bolond b. Provide an analysis to determine the relative product profitability (contribution margin per furnace hour) assuming that the furnace is the bottleneck. TE OG TO 102 Regular Grade Good Grade High Grade 250071 Which Grade should Hercules produce