Hey there I have a couple questions for my accounting homework that I do not understand.

P9.2 (Relevant Cost of Materials) Universal Conglomerates has a new product that requires 150

kg of material (Y876), which is in continual use within the firm. There are 100 kg ofY876 in

inventory, at a cost $11.00/kg. The replacement value is $12.50/kg and the scrap value is $2.00/kg.

a. Calculate the relevant cost of the material to be used in the new product.

b. How would the relevant cost of materials change if there is an excess of inventory of this

material?

P9.3 (Product Mix Dedsions under Capadty Constraints) Magnificent Products makes three

products: Macro, Mezzo, and Micro. The following information has been provided in relation to

each product:

Macro Mezzo Micro

Budgeted sales units 10,000 7,500 5,000

Selling price per unit $12 $16 $18

Direct materials $3 $6 $1

Direct labour $3 $1 $3

Machine hours per unit 3 3 5

a. If the company has a limited production capacity, preventing all of its budgeted sales from

being produced, how should Magnificent rank its products for manufacture in order to

maximize profitability?

b. If the production operation at Magnificent has a set production schedule for the next two

months, which means that employees' work schedules are fixed regardless of the sales mix or

production volumes, how will this change your recommended product mix?