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RTP osts ble 00 30 18 103 Key Factor Allocation - Product Mix Decision RTP Sum Toys Ltd manufactures and sells children's toys of high quality over an extensive market, utilizing the services of skilled artisans who are paid at an average rate of 15 per hour. The total number of skilled labour hours available in a year is only 14,000. The details of planned production for the year, estimated cost and unit selling prices are given below - Production Toy Cost of Production per unit) Planned Direct Materials Selling Price per unit) Direct Labour Fixed Overheads A 3,000 units 20 10 15 70 B 4,000 units 24 12 92 C 4,000 units 32 12 18 95 D 3,000 units 40 16 24 110 E 2,400 units 60 20 30 180 Variable Overhead Costs amount to 50% of the Direct Labour Cost. The Company has estimated the following maximum and minimum demand for each product: Toy A B E C D Maximum (units) 5,000 6,000 6,000 4,000 4,000 500 500 Minimum (units) 1,000 1,000 1,000 1. What is the estimated profit for the year as per the Company's Production Plan? 2. What would be the plan for Maximum Profit? 3. What is the Estimated Profit as per the plan suggested by you in (2) above? 14 000 hours Hence DLH is the Key Factor