1. A company manufactures three products - X, Y and Z. The sales demand and the budgeted unit selling prices and costs for the next accounting period are estimated to be as follows: Maximum demand (units) Selling price Variable Costs: Raw materials ($1 per kg) Direct labor ($12 per hour) X 4,000 Y 5,500 Z 7,000 $ per $ per $ per unit unit unit 28.00 22.00 30.00 5.00 $12.00 4.00 $9.00 6.00 $18.00 If supplies in the period are restricted to 90,000kg of raw material and 18,000 hours of direct labor, what will be the limiting factor? A Direct labor B Raw material C Both direct labor and raw material D Neither direct labor nor raw material 2. W Ltd makes leather purses and has drawn up the following budget for its next financial period: Selling Price per unit Variable Production Costs per unit Variable Sales Commission Cost per unit Fixed Production Costs Fixed Selling and Administration Costs Sales units $11.60 $3.40 5% of selling price $430,500 $198,150 90,000 units The margin of safety as a percentage is? A 5.6% B 8.3% C 11.6% D 14.8%