ACC 2302: INTRODUCTION TO MANAGEMENT ACCOUNTING

ASSIGNMENT-2

A company is planning to produce products A, B, C and D in order to satisfy market demand as per the following schedule:

Product	Market DD
A	14,000
B	8,000
C	12,500
D	6,000

The unit cost statement for these products is as follows:

	A	B	C	D
Selling price	480	250	400	800
Variable costs:
Direct materials @ ksh 30 per kg	180	90	150	120
Direct labour @ ksh 10 per hour	140	60	80	250
Variable overheads	30	50	70	150

The management is aware that direct labour is currently in short supply and only limited amount of 350,000 hours can be availed.

Required:

Calculate the optimal contribution given the information provided.