Savino Company has assembled the following data pertaining to its two products.

	Thermometer	Barometer
Direct material cost per unit	$11	$6
Direct labor cost per unit	$ 9	$ 4
Manufacturing overhead cost applied @ $16 per machine hour (per unit of product)	$32	$16
Annual demand (in units)	28,000	20,000

Past experience has shown that the fixed manufacturing overhead component included in the manufacturing overhead cost per machine hour is $10 and the rest of the manufacturing overhead cost is variable component. The selling price of thermometer and barometer is $60 and $35 respectively.

Required:

Rank these two products according to profitability using first Contribution margin per unit as the profitability metric and then using Contribution Margin Ratio as the profitability metric.

If 50,000 machine hours are available for Savino for the manufacture of thermometers and barometers, and Savino wants to follow an optimal strategy to maximize profits, how many units of each product should the firm manufacture?

How many units of each product would Savino leave behind in the market for the competitors to pickup because of the constraint on machine capacity?

How much contribution would the company generate under this production plan arrived in part (b)?