Big Tooth Company manufactures three models of electric toothbrushes. Unit selling prices and unit costs for the three models are as follows: Selling price Direct materials Direct labour ($10 per hour Variable overhead Fixed overhead Standard $58 16 10 8 10 Premium $65 20 15 12 5 Deluxe $100 19 20 16 15 Current sales volume in units Estimated annual demand in units 3,900 5.000 6.000 2,800 3.200 4,500 Variable overhead is applied at a rate of $8 per direct-labour hour, while fixed overhead is applied at a rate of $50 per machine hours The demand for all three models of toothbrushes this year was greater than what the company could produce. Although there are no shortages of materials or labour machine hours were in limited supply and was the constraining factor for production. Big Tooth plans to modernize its manufacturing equipment next year giving the company an increase of 10% in available machine hours for production Big Tooth Company would like to produce at least the same number of each model of toothbrushes next year as they did this year. Management however wants to know how the extra machine hours generated by the more efficient machine should be used. Required: 1. Determine how the extra machine hours should be used in the upcoming year. 2. By how much will the extra hours of machine time increase the Company's contribution margin next year