10:05

10:05 Yesterday 15:29 Pigeon Ltd make garden buildings. They produce three types which all have the same base. front, back and roof. The basic model is the Store which has no windows. The Shed has one glazed and the Office has two glazed windows. The production process includes cutting. fitting and for the Shed and Office products glazing. Demand for garden buildings has increased and Pigeon Ltd hope to increase production and sales, particularly the "Office" model. The latest monthly accounts showed the "Office" product as making a low profit. Senior management are cutious about increasing volume on a potential loss-making product Forecasted information for the current ar is shown below: Edit Product: Production & Sales (units) Selling price per unit, E Direct materials per unit, E Direct labour hours per unit Labour costs EIO per hour. Store 500 2350.00 E40.oo 10 Shed 1 ,ooo 2400.00 E45.oo 15 Office 200 E500.oo E50.OO 25 Pigeon Ltd has an annual fixed overhead of 200,000 Req uired: - (a) . Using Marginal Costing principles calculate the total budgeted sales revenue, direct costs, and profit for Pigeon Ltd. (3 marks) (b) produce a cost statement showing the budgeted profit per unit for each type of product if Pigeon Ltd uses labour hours for the overhead absorption. (5 marks) -0000001