Western Glassworks (WG) produces leaded crystal glassware. Recently, WG received an unexpected order from a customer that wanted WG to design and produce 100 leaded glass pitchers that the customer would use for promotion. 

Production at WG is limited by the availability of the highly-skilled workers who produce and engrave these products. These workers are paid a fixed salary of $1,000 per week regardless of their actual working hours. For the upcoming period, there is an absolute constraint of 1,100 worker hours. WG has already taken orders from other customers that will require 900 worker hours. 

Production of the new product would require 1.5 worker hours per pitcher and $50 of materials cost per pitcher. Variable overhead cost is $40 per worker hour consumed. The sales manager has advised that the customer will demand that all 100 units be provided if the order is accepted. The sales manager has also indicated that to fill this special order, some of the existing production can be displaced if needed. The product that would be displaced has a contribution margin of $160 per unit and requires 1.25 labor hours per unit to produce. 

Required 

(a) What is the minimum price that WG should demand to fill this order? 

(b) Suppose now that WG has already committed 1,000 worker hours to previous orders and has only 100 idle hours available to apply to the new order. What is the minimum price that WG should demand to fill this order?