- 3 LTE 1:43 PM 4 35%

LTE 1:43 PM ACY2002 Sl Questions 35% _ Final.pdf Question 2 (IS marks) David Wong. the product manager or KiKi Company, was reviewing the production schedule for the last quarter Of 2020_ that the company planned to sell units during the year and keep a minimum closing inventory level at on 31 December 2020. As at 30 September 2020, the following data was reported. Inventory, I January 2020 Sales Inventory, 30 September 2020 Units 3,000 2,700 At the beginning year, lhe company a warehouse that could Store its up I , 250 units. The company had a maximum production capacity of 2300 units per quarter. Required: (a) (b) (c) Assume that Kiki Company adopted marginal costing, (i) what is the minimum units that the company sho uld produce during the last quarter of 2020? (2 marks) (ii) will the number of units produced affect the company's profit or loss for the year? Explain. (3 marks) Assume that thc company adopted absorption Costing and David was given an annual bonus on the company ' s reported profit. If David 10 his in 2020, ho W many units would he produce? Hxplain, (5 marks) Advise thc management of thc company on the costing method that should bc chosen to determine David's bonus? (5 marks) [Total for Question 2: 15 marks] End or Question paper