Khan Ltd can render three different types of service (Alpha, Beta and Gamma) using the same staff. Various estimates for next year have been made as follows:

Required:

(a) If the business were to render only service Alpha next year, how many units of the service would it need to provide in order to break even? (Assume for this part of the question that there is no effective limit to market size and staffing level.)

(b) If the business has limited staff hours available next year, in which order of preference would the three services come?

(c) The maximum market for next year for the three services is as follows:

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Selling price (£/unit) Variable material cost (£/unit) Other variable costs (£/unit) Share of fixed cost (£/unit) Staff time required (hours) Fixed cost for next year is expected to total £40,000. Service Alpha Beta Gamma 30 20 15 10 682 39 18 10 12 3 541