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(0) IVARS) QUESTION ONE Msongozi Plc is a Tanzanian registered company running three business segments. The company! is contemplating to drop one of its segments
(0) IVARS) QUESTION ONE Msongozi Plc is a Tanzanian registered company running three business segments. The company! is contemplating to drop one of its segments to maintain its profitability level. The following budgeted information relates to a Company Ltd for the forthcoming period: - Segments B 50.000 Sales and production (units) 30.000 10,000 Selling price (per unit) Prime cost (per unit) 32 Machine department (Machine hours/ unit) Assembly department (Direct Labour hours unit) 7 15 Overheads allocated and apportioned to production departments were to be absorbed in product costs as follows: Machine department at TZS 1.20 per machine hour. Assembly department at TZS 0.825 per Direct labour hour. You ascertain that the above overheads could be re-analyzed into cost pools as follows: Cost pool Cost Driver Quantity for the period Machine services 357,000 Machine hours 120,000 Assembly services 318,000 Direct lab our hours 530.000 Sct-up costs 26,000 Sct-ups Order processing 156,000 Customer orders 32.000 Purchasing 81,000 Suppliers orders 11.200 -520 B 200 You have also been provided with the following estimates for the period: C Number of set-ups 120 200 Customer orders 8.000 8.000 16.000 Suppliers orders 3.000 1.000 1.200 Required: Make an informed analysis to determine whether any segment should be dropped. Justily your
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