Case Application 1: (19 marks) Artmag Ltd developed an educational products for toddlers made by 3D printer, the product called Learning Resources (LR). The product was so popular that two add on versions are produced, namely Learning Resources II (LR2) and Learning Resources III (HA3). The costs of developing the products were $95,000 for LR, $10,000 for LR2, and $15,000 for LR3. The production process consists of copying the products using computer and the 3D printer then packing them with printed instructions in a display box. It takes longer to printing the LR than the other versions. Artmeg can produce, ready for shipping, about 100 pieces of LR. 150 pieces of LR2, or 135 pieces of LR3 in an hour. LR LR2 $ 29.00 LR3 $ 29.00 49.00 Per game Selling price Production costs: - Material - Instructions and packaging - Fixed overheads Next month's demand 5.00 4.00 19.00 1.50 2.00 1.00 0.50 2.00 3.00 18,000 units 18,000 units 13,500 units Fixed overhead costs were determined for each product by dividing the product's development costs by the estimated minimum total demand for each product. Artmag is owned by Emily who is a busy entrepreneur, she can only commit 250 hours in producing the products per month. The company can outsource any quantity of each product to Sylvester Ltd at the following prices next month: LR LR2 LR3 Outsource price per product $37 $9 $11 Required: (a) Calculate the sufficiency of Emily's time for next month. (2.5 marks) (b) Determine how many units of which products should Emily produce and outsource to Sylvester Ltd if Artrmeg Ltd wished to fulfill the demand requirements next month. (8.5 marks) (c) State four (4) other factors that the management of Artmag Ltd should consider before making a final decision to outsource the games to Sylvester Ltd for next month. (200-300 words) (8 marks) "Note: Show all the relevant workings and keep to 2 decimal places where applicable ACC20007