Wookie company has idle space in its facilities and is considering two alternative products that they might produce and sell using the idle space. No additional equipment will need to be purchased to produce either product. The costs and revenues associated with the two alternatives are listed below:

Alternative 1 Alternative 2

Projected revenue $100,000 $125,000

Direct Materials 20,000 30,000

Direct Labor 20,000 25,000

Advertising 15,000 15,000

Facility rent 10,000 10,000

If Wookie can only produce one of the products, which alternative should be selected based on this information?

Group of answer choices

Alternative 1 because it produces a higher profit

Alternative 2 because it produces higher revenue

Alternative 1 because it has fewer unit-level costs

Alternative 2 because it produces a higher profit