A company is examining two of its products, $\mathrm{X}-121$ and $\mathrm{Y}-707$. The following information is being reviewed

\begin{tabular}{|c|c|c|}

\hline & $X-121$ & $Y-707$ \\

\hline Unit selling price. & $\$ 28.50$ & $\$ 21.00$ \\

\hline Materials required per unit & $\$ 3.00$ & $\$ 1.50$ \\

\hline Direct labor required per unit & $\$ 2.50$ & $\$ 1.25$ \\

\hline Variable manufacturing overhead per unit. . & $\$ 0.50$ & $\$ 1.00$ \\

\hline Production time per unit (in hours) . . . . . . . . . & 1.5 & 1 \\

\hline

\end{tabular}

1. Which item should the company manufacture if there is no constraint on hours of production?

2. If full production capacity is 1,500 hours, and if the company can sell all the units it makes, which item should it manufacture? Why?