a. Z ltd has 50 kg of material P in inventory that was bought five years ago for C70. It is no longer used but could be sold for C3/kg. Z ltd is currently pricing a job that could use 40 kg of material P. Required: Calculate the relevant cost of material P that should be included in the contract (3 marks) ii. 100 hours of unskilled labour are needed for a contract. The company has no surplus capacity at the moment. But additional temporary staff could be hired at C4.50 per hour. Required: Calculate the relevant cost of the unskilled labour on the contract (2 marks) b. A company is able to produce four products and is planning its production mix for the following period. The relevant data is given below: Selling price (C) per unit Labour cost per unit (C) Material cost per unit (C) Maximum demand (units) M 19 6 9 1,000 N P 25 40 50 12 18 24 9 15 16 5,000 4,000 2,000 Labour is paid C6 per hour and labour hours are limited to 12,000 hours in the period. Required: Determine the optimal production plan and calculate the total contribution it earns for the company. b. The following information relates to Product A. Selling price per unit C100 Variable cost per unit C56 Fixed costs 220,000 Budgeted sales are 7,500 units. (6 marks) Page 4 of 5 24 Required: 1. Calculate the C/S ratio. ii. Calculate the breakeven point in terms of units sold. iii. Calculate the breakeven point in terms of sales revenue. iv. Calculate the unit sales required to achieve a target profit of C550,000. V. Calculate the margin of safety (expressed as a percentage of budgeted sales). (7.5 marks) (Total: 17.5)