4-Decision Making - 12 Marks - 20 minutes The following three sections are independent from each other a. Sam. Co is a Manufacturing company. Currently due to a labor strike the company has access to only to 27,000 direct labor hours available for producing three products named A and B and C. The following information is related to these products: Product A Product B Product C Maximum demand 5,500 7,500 4,000 Selling price per unit 57 36 25 25 Variable cost per unit 49.5 30 18 Direct labor hours required per 3 2 3.5 unit Required: How many units of product A, B and C should Sam Co. produce this year? (4.5 marks) b. Arya Inc. uses a joint production process to produce two products (regular and luxury). The Corporation has $200,000 of joint processing costs this year and is considering whether to process its two products beyond the split-off point. Information about the two products follow: Regular Luxury Units produced Total variable cost of processing further Regular Luxury 26,000 17,000 $78,000 $119,000 Required: Selling price per unit at split off point 20 55 26 62 Selling price per unit after further processing Should the two products be processed further? Show all your calculations (4 marks) C. A Corporation is composed of three divisions. The following information relates to these three Division: A B C Sales $7,500,000 $8,000,000 $5,500,000 Variable cost 5.100.000 4.600.000 3.800.000 Contribution margin 2,400,000 3,400,000 1,700,000 Avoidable fixed cost 1.900.000 3.700,000 1.500.000 Operating income $ 500,000 ($300,000) $ 200.000 The company is considering closing Division B. If division B is closed, then the sales of division C will increase by 5%, while sales of division A will decrease by 20%. What will be the impact on the company's overall profitability if Division B is closed? (3.5 marks)