• Prescott Inc. sells coffee mugs and water bottles. Sales of coffee mugs traditionally run around 275,000 per year and sales of water bottles are 500,000 sharply increasing over the past 3-years as the health benefits of drinking water has increased. Each department is its own profit center. The coffee mugs cost is $1.40 and sell for $3.00 per unit. The water bottles cost is $2.10 and retails for $5.00 per unit. The management is considering putting together a promotion to sell 1-coffee mug and 1-water bottle for a combined price of $7.00.Required: Determine the profit-margin of each of the coffee mug and water bottle, using:the stand-alone method (based on cost).The incremental method based on demand.Which would you recommend? Why?