Cole Company manufactures only two products-a battery charger and a testing machine for automobile engines. An average of 30,000 chargers and 50,000 testers are sold each year. This year, the company can afford only $\$ 60,000$ for advertising the products, which is just enough to advertise one product effectively. The marketing manager expects that the sales of chargers will increase by 20 percent if they are ad vertised and that the sales of testers will increase by 10 percent if they are advertised.

The following information about the two products has been provided by the accountant:

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

\hline & Charger & Tester \\

\hline Selling price per unit . . . . . . . . . . & $\$ 70$ & 590 \\

\hline Variable cost per unit. . & $\$ 30$ & $\$ 40$ \\

\hline Fixed cost per unit. . . . . . & $\$ 30$ & $\$ 40$ \\

\hline Production time per unit (in hours) & 2 & 4 \\

\hline

\end{tabular}

1. If Cole had an unlimited number of labor hours, would you recommend that it advertise either of its products? If yes, which one and why?

2. Assume that Cole has a capacity of 260,000 labor hours. Would you still advertise? If so, which product would you advertise?