1. Critically discuss why strategy became increasingly important and elaborate on the current challenges. (170 words)

[Marks: 5]

2. Time Plc. is a small business that produces watches. The company has total fixed costs of $8,360,000 per month and variable cost per unit is $108. The company has estimated monthly sales demand for calculators, at a range of possible selling prices, as follows:

Selling price ($)	Units sold
160	180,000
192	160,000
224	140,000
256	130,000
288	100,000
304	80,000

Required: Advice Time Plc. on the profit maximizing selling price for the calculator. (70 words)

[Marks: 5]

3. QWE manufactures two products from different combinations of the same resources. Unit selling prices and unit cost details for each product are as follows:

Product	X	Y
	$/Unit	$/Unit
Selling Price	300	280
Direct Material A($8 per Kg)	40	32
Direct Material B($10 per Kg)	60	40
Skilled labour ($16 per hour)	64	48
Variable overhead ($6 per machine hour)	36	24
Fixed overhead	60	70
Profit	40	66

The maximum monthly demand for products X and Y is 1,600 units and 2,000 units, respectively, and this is the normal monthly production volume achieved by QWE. However, for the next year the achievable production level will be reduced due to a shortage of available resources. The resources that are expected to be available each month are as follows:

Direct material A	12,000 kg
Direct material B	13,000 kg
Skilled labour	14,000 hours
Machine time	20,000 machine hours

Required: Using linear programming (simultaneous equations method) identify the monthly production schedule and the total contribution for products X and Y that maximises the profits of QWE per month. (250 words)

[Marks: 10]

4. Rami Industries wants to launch a new product (K2) in the market. The company expects 30% margin on selling price. The current market price of the similar product is $300. The production cost of this product currently comes around $240 per unit.

Required: Calculate the reduction required in cost to meet the target cost per unit. (20 words)

[Marks: 5]

5. PLC Industries has developed a new product called K2 with a full cost of $730. The company desires a 20% mark up on selling price.

Required: If the company adopts cost plus pricing method for the selling prices, calculate the mark up and the selling price of K2. (25 words)

[Marks: 5]

[Marks: 5+5+10+5+5 = 30]