Shred, Inc. manufactures two types of paper shredders, Mini and Deluxe. Here are data for the current month:

Mini shredder Deluxe shredder

Selling price $240 per unit $480 per unit

Variable costs $160 per unit $370 per unit

Shred can manufacture 40 Mini shredders per hour but only 20 Deluxe shredders per hour. Fixed costs are $1.2 million per month and Shreds maximum operating capacity is 600 hours per month. Fixed costs are unaffected by the mix of products produced. Monthly demand is 17,000 Mini shredders and 10,000 Deluxe shredders.

a. What is Shreds operating income if it allocates the 600 operating hours 50-50 between Mini and Deluxe shredders? __________

b. What is Shreds operating income if it emphasizes the product with the highest contribution margin per unit of constraint? ________