ABC Ltd supplies spare parts to an aircraft manufacturing company BB Ltd. ABC Ltd produces two types of spare parts: Alpha and Beta. The production capacity of ABC Ltd facilitates production of only one spare at a time. In other words, the two different spare parts cannot be produced simultaneously. The production of each unit of Alpha and Beta require 1.6 kilos of a specially processed alloy. The production of each unit of Alpha requires 0.64 hours of machining with Machine A and 0.5 hours of machining with Machine B. The production of Each unit of Beta requires 0.25 hours of machining with Machine A and 0.60 hours of machining with Machine B. ABC Ltd's target selling price for each unit of Alpha is $145 and the target selling price for each unit of Beta is $115. Total capacity available of Machine A is 4,000 hours and total capacity available of machine B is 4,500 hours. Total supply available of the alloy which is required to produce the spare parts is 13,000 kilos. ABC Ltd pays $12.50 per kilo for the alloy. In addition, ABC Ltd incurs variable overheads at a rate of $80 per machine hour of A and $100 per machine hour of B.

Required:

(a) Identify the spare part which will optimize contribution at the target price.

(b) If BB Ltd reduces the target price by 10% and offers $60 per hour of unutilised machine time, what will be the total contribution from the spart part identified in requirement (a) above?