Cole Company manufactures only two products'a battery charger and a testing machine for automobile engines. An average of 30,000 chargers and 50,000 testers are sold each year. This year, Cole can afford only $60,000 for advertising the products, which is just enough to advertise one product effectively. The marketing manager expects that the sales of chargers will increase by 20% if they are advertised and that the sales of testers will increase by 10% if they are advertised. The following information about the two products has been provided by the accountant:

Required:
1. If Cole had an unlimited number of labor hours, would you recommend that it advertise either of its products? If yes, which one and why?
2. Assume that Cole has a capacity of 260,000 labor hours. Should Cole still advertise? If so, which product should itadvertise?

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Tester Charger Selling price per unit Variable cost per unit. Fixed cost per unit. Production time per unit lin hours) $90 $40 $40 4 $70 S30 S30 2