Question 3 (8 marks) Crazy Creations Ltd. (Crazy) makes three products in a single facility: matches, logs, and straws. These products have the following unit product costs: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Matches Logs Straws $10.90 $15.80 $8.00 12.50 12.60 9.90 2.40 1.20 1.40 11.60 7.20 7.90 Additional information related to these products is as follows: Sanding machine minutes per unit Selling price per unit Variable selling costs per unit Monthly demand in units Matches Logs Straws 1.0 0.5 2.0 $55.80 $54.60 $43.10 $ 2.10 $ 1.40 $ 1.90 2,000 1,000 3,000 The sanding machines are a potential constraint in Crazy's production facility. A total of 5,900 minutes per month are available on these machines. Direct labour is a variable cost for all products. Required: a) Calculate how much additional capacity would be required to satisfy the demand for all three of Crazy's products. (2 marks) b) Determine how much of each product should be produced, rounded to the nearest whole unit, to maximize Crazy's operating income. (5 marks) c) Determine the maximum that Crazy should be willing to pay for one additional minute of sanding machine time if Crazy makes the best use of the existing sanding machine capacity. (1 mark)