QUESTION 3 (20 Marks) Love Pavlova Company (LPC) makes pavlova and has been operating successfully for the past two years. However, commpetiton is becoming more intense, particularly in the suburb of GanuLand. LPC's management team requests assistance from you in determining an economical sales and production mix for the coming year. LPC has provided the following product costs for its three types of pavlova, RB, WC and BC: Pavlova Per unit costs: RB (RM) WC (RM) BC (RM) Direct materials 6.00 8.00 9.00 Direct labor 4.00 4.50 5.00 Variable manufacturing overhead 3.00 4.00 6.00 Fixed manufacturing overhead 4.60 6.60 3.60 The following information is available: a. LPC's plant has a capacity of 2,000 minutes of mixing machine per month, which are potentially the constraint in the production facility. Mixing minutes per unit for the pavlova, RB: 3 minutes; WC: 4 minutes and BC: 5 minutes. b. Direct labor is a variable cost in this company. C. Selling price per unit for each pavlova, RB: RM30.00; WC: RM36.00 and BC: RM32.00. d. Variable selling costs for each pavlova, RB: RM2.00; WC: RM2.50 and BC: RM1.50. e. Monthly demand for each pavlova, RB: 100 units; WC: 150 units and BC: 300 units. Required: a) Determine how many units of each pavlova should be produced to maximize the profitability of using the limited resource of mixing machine hours (Assume that the demand for the pavlova is increasing and LPC does not want to reduce sales of any product). (18 marks) b) Describe management's approach to the product mix decisions when there are limited floor space, machine hours or labour hours available for production. (2 marks)