1. ABC limited produces 3 products X, Y and Z. The following information is available. It uses one type of material Alpha to produce all the three products.

Product X Y Z

Demand (units) 3,000 2,500 2,000

Variable cost to make ($ per unit) 14 15 11

Buy-in price ($ per unit) 13 18 12

Kg of Alpha required per unit 1kg 1.5kg 2kg

(Included in variable cost)

Required:

1. Which products should the company make, and which should it buy? (2 Mark)

3. ABC limited produces 3 products X, Y and Z. The following information is available. It uses one type of material Alpha to produce all the three products. Product Demand (units) Variable cost to make ($ per unit) Buy-in price ($ per unit) kg of Alpha required per unit 3,000 14 13 1kg Y 2,500 15 18 1.5kg Z 2,000 11 12 2kg (Included in variable cost) Required: a) Which products should the company make, and which should it buy? (2 Mark) on