Question
Following information has been made available from the cost records of Honda Auto Bhd., manufacturing spare parts: Particulars Oil Cap Contact point Direct Material RM
Following information has been made available from the cost records of Honda Auto Bhd., manufacturing spare parts:
Particulars | Oil Cap | Contact point |
Direct Material | RM 4 | RM 5 |
Direct Labour | 16 hours @ RM0.50 per hour | 12 hours @ RM 0.50 per hour |
Selling Price | RM 26 | RM 24 |
Variable Overhead | 150% of direct labour | |
Fixed Overhead | RM 750 |
The directors want to be acquainted with the desirability of adopting any one of the following alternative sales mixes in the budget for the next period:
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150 units of Oil Cap and 350 units of Contact point
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350 units of Oil Cap and 150 units of Contact point
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400 units of Oil Cap and 100 units of Contact point
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100 units of Oil Cap and 400 units of Contact point
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250 units of Oil Cap and 250 units of Contact point
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300 units of Oil Cap and 300 units of Contact point
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500 units of Oil Cap only
-
500 units of Contact point only
REQUIRED;
(a) Compute the net profit for each of the above alternatives.
(b) Choose the best alternative for the management.
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