Best Ltd is a manufacturer of cleaning materials. It produces 3 types of cleaning materials namely: Clean All, Clean Well, and Clean Perfect. The details of the three products for the year ended 30th June 2017 are as follows: -

	Clean All (A)	Clean Well (B)	Clean Perfect (C)
Production/Sales	500	8000	10 000
Direct Materials Costs/Liter ($50/Liter)	125	150	95
Direct Materials Costs/Liter ($100/hour)	350	475	295
Variable Costs/Liter	100	150	180
Selling Price/Liter	1000	1400	900
Fixed Overhead/Liter	115	100	90

Required:

(a) Calculate total profit/loss for each product and overall profit/loss for the organization for the year ended 30th June 2017 using a marginal costing approach (Contribution approach).

The company has been informed by his supplier of raw materials that there is a shortage of raw materials on the world market and as such only 45 000 liters will be made available to the company.

(b) Required to calculate:

(i) The total number of liters of finished goods of each product to be manufactured by the organization taking into consideration the above information.

(ii) The total profit/loss for each product and overall profit/loss for the organisation based on your answer of (b) (i).

The company has been approached by a customer for a special order of 2000 liters of product B (Clean Well). However, the customer will be ready to pay a price of $1000/liters.

(c) Assuming that the company has spare capacity to undertake the order, advise the directors of the company whether or not to accept the order. Your answer should include appropriate calculations.