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P 2-11 Bob's Boots Led. manufactures three different products - boots, slippers, and runners. Considerable market demand exists for all models. The following per unit data apply: Boots Slippers Runners Selling price $150 $20 $85 Direct materials 100 6 50 Direct labour ($20/hr.) 20 UT 10 Fixed mfg. support 8 4 10 Net revenue $22 $5 $15 Required: If there is no excess labour capacity, which model(s) should the company produce to maximize profits? P 2-12 Pete's Premium Pistols Ltd. manufactures three different products - handguns, rifles, and shotguns. Considerable market demand exists for all models, but output is constrained because production machinery is running at maximum capacity. The following per-unit information has been calculated: Rifles Handguns Shotguns Selling price $150 $20 $85 Direct materials 100 8 40 Direct labour ($20 per hour) 20 5 10 Variable manufacturing support ($4 per machine hour) 10 2 12 Indirect fixed manufacturing support costs 8 4 20 Total expenses 138 19 82 Pre-tax profit $12 $1 $3 Required: Recommend what the company should do to maximize profits