Question 4: Choosing the product mix when capacity is in short supply You have three product lines: Basic, Premium, and Supreme. You have limited capacity of 300 machine hours. You face excess demand for all three products (assume unlimited demand for simplicity). Basic Premium Supreme Price per unit $2,400 $5,600 $8,000 Unit variable cost $800 $1,600 $2,400 Machine hours per unit 1 2 Compute the CM per unit of capacity (i.e, per machine-hour) for each product: Basic = $ per hour Premium = $ per hour Supreme = $ per hour Which product(s) should you make? O Make all three products to take advantage of the high demand O Supreme only O Basic only O Premium only How many units of each product should you make? (enter o for products that you do not want to make) Basic = units Premium = units Supreme = units Hint if you get stuck: You have 300 machine hours