AMA

AMA

Question 11: A machine manufacturing company needs four components A, B, C and D. The components may be procured from outside. The cost, market price for the components and other information are given below: 2,000 UHARTO MANAGEMENT ACCOUNTING THEORY AND IN 3.500 Figs. per unit Number of its required 150 Direct Material Direct Hoges Direct expenses at 40 per machine hour 320 Pared Cost 380 Total Cost 400 3300 Market Price hec 3 manat Puch There are constraints on the machine time in manufacturing all the components. Total mach he b t is only 12.000 hours tas possible to use the machine time in a second shift which will attract 205 extra wa and other fixed werheads at 6.000 for every 1.000 hours or part thereof with relevant supporting figures, advise the best course of action to maximize the profil Note: Students need not work out the complete profitability statements) (May-20