Deena Precision Tools (DPT) makes cutting tools for metalworking operations. It makes two types of tools: RC6, a regular cutting tool, and HP4, a high precision cutting tool. RC6 is manufactured on a regular machine, but HP4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: Selling price HP4 RC6 RM200 RM300 RM120 RM200 RM30 RM70 RM700,000 RM1,100,000 Hours required to produce one unit on the regular machine 1.0 0.5 Variable manufacturing cost per unit Variable marketing cost per unit Budgeted total fixed overhead costs Additional information includes the following: i. ii. iii. iv. DPT faces a capacity constraint on the regular machine of 50,000 hours per year. The capacity of the high-precision machine is not a constraint. Of the RM1,100,000 budgeted fixed overhead costs of HP4, RM600,000 are lease payments for the high-precision machine. This cost is charged entirely to HP4 because DPT uses the machine exclusively to produce HP4. The company can cancel the lease agreement for the high-precision machine at any time without penalties. All other overhead costs are fixed and cannot be changed. (c) Suppose that the capacity of the regular machines has been increased to 65,000 hours. DPT has been approached by Zahra Enterprise to supply 20,000 units of another Jail cutting tool, V2, for RM240 per unit. DPT must either accept the order for all 20,000 units or reject it totally. V2 is exactly like RC6 except that its variable manufacturing cost is RM140 per unit. (It takes 1 hour to produce one unit of V2 on the regular machine, and variable marketing cost equals RM30 per unit.) What product mix should DPT choose to maximize operating income? Show your calculations. (12 marks)