Butch Master, produces two types of Hammers with lifetime warranties. The industrial hammer requires 2.4 labor hours and the residential hammer requires 1.1 labor hours. The company has only 800 available labor hours per week. The company can sell all it can produce of either product.

IndustrialResidential

Selling price $360 $210

Variable costs 220 150

Contribution margin $140 $60

a)Which hammer(s) should the company sell? and why?

b)What would be the incremental benefit of obtaining 200 additional labor hours?