control water flow for different diameter pipes: 12 millimetre, 19 millimetre and 25 millimetre. These products are catalogued respectively as 12MM, 19MM and 25MM. There are 32 500 total machining hours and employees are trained to produce any of the three products. 12MM 19MM 25MM $75.00 $150.00 $195.00 $128.80) $134.00) $ 142.50) $115.00) $124.00) $131.50) Item Selling price per unit Variable costs per unit Materials Labour for machining and finishing Variable indirect costs Contribution margin per unit of output Market demand for products Machining and finishing hours Total production machining hours capacity $15.00) $19.00) $115.00) $26.20 $83.00 $106.00 8 000 50 000 0.5 hr 12 000 0.8 hr 1.05 hr 32 500 SE15.16 Profitability through production schedule under restricted input resource conditions with long-term committed contracts L04 STAIRCASE 15.8 Refer to the information about Aqua Restrictors Ltd. The marketing manager explains that AquaRestrictors Ltd has an existing fixed long-term contract to which it is committed. That is, AquaRestrictors Ltd must first sell a specific number of each of its products to these contracted customers to fulfil these contracts. Once these contracted orders have been fulfilled, all three products may be sold to any customers. The number of units of each product that must be sold first under the long-term committed contracts are shown below: Item Long-term contracts 12MM 38 000 19MM 4000 25MM 2 500