Good dayPlease assist with homework activity

The initial market response has been positive and management is also considering the manufacture of a high quality camping chair. The chair has the following cost structure: R Selling Price 480 Direct Labour (80) Direct Material (120) Variable Overhead (50) 230 For fixed overhead allocation purposes, the chair is expected to spend an hour in each production department during the manufacturing process. The initial demand for the chair is expected to be approximately 4 000 units per annum. Although the chairs can be manufactured without any increase in fixed overheads, direct labour is limited to 30 000 hours due to the unavailability of skilled labour. The variable selling cost per unit is at R25. The owner has requested that 500 chairs also be kept as closing stock at year-end. 4. Calculate the product mix that will maximise profits. (14) 5. Based on the profit maximising product mix calculated in 4 above, prepare a budgeted income statement using variable costing principles. (14) 6. Based on the profit maximising output calculated in 4 above, prepare a budgeted income statement using absorption costing principles. ( 12 )