Machine hours required per unit 2.5 3.0 Standard cost per unit: Direct material $4.50 $7.50 Direct labour 8.00 9.00 Manufacturing overhead: Variable (applied on basis of direct labourhours) 4.00 4.50 Fixed (applied on basis of machine hours) 7.50 9.00 $24.00 $30.00

Eco Clean's annual requirement for these ingredients is 7000 units of Aloe Organic and 9000 units of Grapefruit Grove. Recently, Eco Clean's management decided to devote additional machine time to other product lines, leaving only 36000 machine hours per year for producing the bearings. An outside company, Westfarm Ltd, has offered to sell Eco Clean its annual requirement of the ingredients at prices of $22.50 for Aloe Organic and $27.00 for Grapefruit Grove. Eco Clean wants to schedule the otherwise idle 36000 machine hours to produce ingredients so that the firm can minimize costs (maximize net benefits). The selling cost per unit is $6.50. The fixed selling and administrative costs is $25000. The average amount of capital invested in the sanitizing machine is $320000 and Eco Clean's target return on investment is 18%.Determine how many units of each ingredient should be manufactured or purchased to maximize its net benefits of the limited resource of machine hours.